The top U.S. and Korean trade officials agreed Wednesday on a path to make changes to the countries' trade agreement, a five-year-old pact that has been a target of criticism from President Donald Trump.
U.S. trade representative Robert Lighthizer and Korean Trade Minister Kim Hyun-chong met in Washington and began a process to amend the agreement, known as the U.S.-Korea Free Trade Agreement, which lowered tariffs between the two countries and set commercial rules of the road. Neither side specified what changes would be sought to the pact, known as Korus.
Continue Reading Below
"I now look forward to intensified engagement with Korea in an expeditious manner to resolve outstanding implementation issues as well as to engage soon on amendments that will lead to fair, reciprocal trade, " Mr. Lighthizer said in a statement.
"As a result of the discussions, both sides shared an understanding of the need to amend the free-trade agreement to further strengthen the mutual benefits," Korea's trade ministry said in a statement.
South Korea plans to take appropriate legal steps necessary for initiating the negotiations to amend the trade deal, which should include an economic feasibility study, public hearings and reports to parliament, the statement said.
Business groups that back the trade pact are likely to be reassured by Wednesday's developments, as the first meeting between Messrs. Lighthizer and Kim went poorly, according to people familiar with the matter.
The Trump administration recently considered taking steps to exit from the trade pact, but those deliberations coincided with North Korean missile tests. Some administration officials, citing the strategic relationship with Seoul, pushed to remain in the pact. Days later, Mr. Lighthizer said he wanted to seek some changes.
The Trump administration is eager to take steps to adjust the trade deal to tackle the U.S.'s trade deficit with South Korea, which is largely driven by the country's exports of cars and cellphones. Officials also want to make sure Seoul is implementing the agreement as planned.
Meanwhile, the U.S. trade deficit in goods with South Korea is falling. In the first seven months of 2017, the U.S. imported $13.1 billion more than it exported to South Korea, compared with a deficit of $18.8 billion in the same period a year earlier.
The Trump administration met significant resistance when considering withdrawing from the agreement with South Korea, a U.S. military ally, at the same time that it was seeking to put pressure on North Korea over its nuclear ambitions. Mr. Trump has also considered exiting the North American Free Trade Agreement, and Mr. Lighthizer is in the middle of negotiations to overhaul that deal.
Washington and Seoul are planning to use the agreement's special "joint committee" process to change the deal rather than starting from scratch with a complete renegotiation, as in Nafta.
The Korea trade pact has a group of staunch defenders in Congress, including lawmakers involved in foreign policy or military issues on the Korean Peninsula as well as representatives of agricultural states. The U.S. exported $1.5 billion in meat products to South Korea last year and $876 million in corn.
"It's just very, very important that we can maintain these good markets that we have overseas with South Korea, with Mexico, with Canada -- with Nafta," Sen. Deb Fischer, a Nebraska Republican, said Tuesday.
She said she has written to Mr. Trump about the Korea agreement. "I encourage the administration to keep those markets open for us so we can have strong trade," she said.
Ms. Fisher, the chairwoman of a Senate panel that oversees U.S. strategic forces, said she recently met Korea's trade minister in Washington and discussed trade as well as the strategic alliance with South Korea.
Still, the agreement is less popular among some U.S. industries that say South Korea hasn't lived up to the spirit of the agreement.
Write to William Mauldin at firstname.lastname@example.org and Kwanwoo Jun at email@example.com
(END) Dow Jones Newswires
October 04, 2017 19:56 ET (23:56 GMT)