US, South Korea change gear on car market trade agreement

WASHINGTON - The US government said it has widened access to South Korea's car market while providing its manufacturers with protection from South Korean imports.

The countries have reached an agreement to overhaul the 6-year-old US-Korea Free Trade Agreement, senior administration officials said on Tuesday, confirming an announcement earlier in Seoul. US President Donald Trump had called the original pact a job killer.

The new deal doubles to 50,000 the cars each US automaker can export annually to South Korea, reduces bureaucratic barriers to US products and extends a 25 percent US tariff on South Korean pickup trucks by 20 years, through 2041.

Seoul also agreed to include US pharmaceutical manufacturers in its national health program's premium reimbursement plan.

Seoul escapes Washington's new 25 percent tariff on imported steel but must accept quotas on steel exports equal to 70 percent of its average annual shipments to the US from 2015 to 2017.

The senior administration officials spoke on condition of anonymity to discuss the policy ahead of an official announcement.

The US this month began imposing the steel tariffs, saying imports jeopardized US national security. But it has been suspending the duties on allies like the European Union, Canada and Mexico.

The US Treasury Department is also in talks on a deal to prevent Seoul from deliberately pushing its currency lower to give South Korean exporters a competitive advantage. A formal agreement on currency would be unprecedented but it would include no enforcement mechanism.

The US trade deficit in goods with South Korea - nearly $23 billion last year - widened after the original pact took effect in 2012, one reason Trump has denounced it.

Trade in autos has been especially lopsided: South Korea last year exported to the US 929,000 passenger vehicles worth $15.7 billion. By contrast, the US shipped to South Korea fewer than 53,000 autos, worth just $1.5 billion, according to the US Commerce Department.

The Washington says Seoul has used nontariff barriers, such as rigorous customs inspections, to block US products.

Unions at South Korea's two largest automakers, Hyundai Motor and Kia Motors, have already blasted the new agreement for blocking access to the fast-growing US pickup truck market.

"It is a humiliating deal that accepts Trump's strategy to pre-emptively block South Korean pickup trucks," Hyundai Motor's labor union said in a statement.

Ap - Xinhua

(China Daily 03/29/2018 page11)