UCF Global Perspectives


Future of US-South Korea Trade Deal Uncertain

Mica Udani, Chastang Fellow, Global Economy

September 6, 2017

American President Donald Trump’s economic advisers are divided over the United States-Korea Free Trade Agreement (KORUS) in light of the growing North Korean nuclear threat. Two senior administration officials reported on Saturday that Trump may withdraw the US from the five-year-old trade agreement with South Korea (NYT). Advocates of withdrawal called KORUS unfair, while other advisers suggested withdrawal could prompt a trade war, leaving both countries vulnerable to North Korea. Robert Lighthizer, US Trade Representative, expressed optimism for the deal on Monday, stating that “the problems with that agreement… will be worked out” (Reuters).

Trade concerns with South Korea coincide with heightened tensions with North Korea. The North Korean government performed its sixth nuclear missile test on Sunday, prompting US lawmakers to urge Trump to maintain strong ties with South Korea (AP). Several top members of the Trump administration, including Defense Secretary James Mattis, national security adviser H.R. McMaster and National Economic Council chairman Gary Cohn oppose withdrawal (WP). In addition to security concerns, withdrawal may create economic concerns by putting American agricultural exports at risk (WSJ).







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