U.S. Trade Representative Looks for 'Successful' Discussions With South Korea

By Jacob M. Schlesinger and William Mauldin Features Dow Jones Newswires

The Trump administration's chief trade negotiator said Tuesday that he is looking to negotiate some changes to the Korea-U.S. free-trade agreement and that he is hoping for a "successful discussion" with the South Koreans -- avoiding any mention of a possible termination of the five-year-old pact.

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The remarks by Robert Lighthizer, the U.S. trade representative, were the first public comments by a top policy maker about the trade agreement, known as Korus, since administration officials said over the weekend that President Donald Trump was seriously considering terminating the pact, and would discuss the matter with advisers this week.

When asked the administration's views on possible Korus withdrawal, Mr. Lighthizer said that "we have negotiations," and that "we would like some amendments to the Korean agreement." But he didn't address directly the prospect of a pullout. Mr. Lighthizer made the comments to reporters after concluding two days of meetings in Mexico City with his Mexican and Canadian counterparts over renegotiating a separate commercial bloc that Mr. Trump has threatened to end, the North American Free Trade Agreement.

It is unclear whether Mr. Trump is still weighing the Korus withdrawal option. His aides had floated the prospect Saturday morning, hours before North Korea conducted its largest nuclear test, raising questions from policy makers and experts across the political spectrum about the wisdom of picking a trade fight with Seoul at a time when Washington needed to craft a consensus strategy with its close military ally to confront Pyongyang.

Mr. Trump has repeatedly criticized the Korean agreement, complaining in particular about the doubling of the U.S. goods trade deficit with South Korea since 2011, the year before the pact took effect, to $27.6 billion last year. Mr. Trump and some aides argue that a trade deficit can inherently be evidence of an unfair trade deal, an argument most economists call inaccurate and misleading.

The internal White House discussion about terminating Korus threatens to fray further Mr. Trump's already-tense relationship with Republicans in Congress, and with big business groups normally on friendly terms with Republican administrations.

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Lawmakers were so alarmed by the weekend reports about the trade pact that, in a rare bipartisan move, the two top trade Republicans on Capitol Hill -- Senate Finance Chairman Orrin Hatch of Utah and House Ways and Means Chairman Kevin Brady of Texas -- joined Tuesday with their Democratic counterparts to issue a statement urging Mr. Trump to back down.

"North Korea's latest nuclear test underscores yet again the vital importance of the strong alliance," the statement said. While acknowledging some "frustrations" and the need to "improve" the pact, the four lawmakers wrote that "to be effective and constructive, however, we must not withdraw from the agreement while we do so."

Iowa Republican Sen. Joni Ernst wrote her own letter to Mr. Trump "to express my strong concern" about the pact's possible abrogation, saying that it "has been particularly favorable for American agriculture." Korus has given American farmers better access to that long-closed market.

Big business groups have also rallied in recent days to try to snuff out Mr. Trump's threat, just as they did in April when he was weighing a Nafta pullout. A Korus termination "would damage White House relations with allies in the business and agriculture communities and in Congress, greatly complicating other initiatives such as tax reform," Thomas Donohue, president of the U.S. Chamber of Commerce, said in a statement issued Tuesday afternoon.

"It's difficult to imagine a move that would bring more self-harm to our economy and national security, with no benefit in return, than withdrawing from Korus," Mr. Donohue concluded. "We urge the administration not to make this rash and irresponsible move."

(END) Dow Jones Newswires

September 05, 2017 19:00 ET (23:00 GMT)