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By Chang Jae-soon
WASHINGTON, July 12 (Yonhap) -- The United States formally notified South Korea that it wants to start the process of revising the free trade agreement between the two countries, the office of the U.S. Trade Representative said Wednesday.
USTR Robert Lighthizer made the notification in a letter to South Korean Trade Minister Joo Hyung-hwan, calling for the convening of "a special Joint Committee meeting under the U.S.-Korea Free Trade Agreement (KORUS) to start the process of negotiating to remove barriers to U.S. trade and consider needed amendments to the agreement," the office said in a statement.
Lighthizer proposed that the meeting take place in Washington next month.
"I believe that this session and follow-on negotiations will provide an opportunity to review progress on the implementation of the Agreement, resolve several problems regarding market access in Korea for U.S. exports, and, most importantly, address our significant trade imbalance," Lighthizer said in the letter.
"Korea is an important ally and key trading partner and in order to strengthen our relationship, we need free, fair, and balanced trade," he said.
Lighthizer also noted that U.S. President Donald Trump and South Korean President Moon Jae-in committed to "foster expanded and balanced trade while creating reciprocal benefits and fair treatment" when they held their first summit in Washington late last month.
"It's imperative that we work together to ensure that the economic partnership between our two countries is not only strong and vibrant, but also fair, and that the KORUS Agreement benefits the U.S. economy as much as it does that of Korea," he said.
Lighthizer said that reducing trade deficits with its trading partners around the world is a key focus of the Trump administration, and the U.S. has "real concerns about our significant trade imbalance with South Korea."
He also said that the U.S. has had a persistent goods deficit with Korea for nearly two decades.
"When the KORUS Agreement was negotiated, expectations were high that both of our economies would realize significant gains," he said. "However, our overall deficit with Korea has increased, and our goods deficit has doubled since the Agreement entered into force," he said. "It is critical that we achieve real progress that fosters a truly fair and level playing field, and a more balanced trade relationship."
The U.S. demand came as no surprise as Trump has long vowed to improve the deal.
During the June 30 summit with Moon, Trump even said that the two countries "are renegotiating" the pact, saying the agreement has been "rough" for the U.S. and calling it "not exactly a great deal."
During last year's campaign, Trump blamed free trade deals for being a key cause of job losses and other American economic problems in an attempt to woo voters struggling with economic difficulties. He denounced the FTA with South Korea a "job killing" deal and a "disaster."
The painstakingly negotiated Korea-U.S. FTA has been in effect since 2012 and has widely been considered a symbol of the economic alliance between the two countries.
South Korean officials say the deal has been mutually beneficial. Experts also say that even though the U.S. has a deficit in goods trade, the country has enjoyed surpluses in services trade under the deal, and U.S. deficits in goods trade would have been larger had it not been for the pact.
The U.S. International Trade Commission (ITC) also said in a report last year that the Korea deal has been good for American interests, saying the agreement is estimated to have improved bilateral merchandise trade balances by $15.8 billion in 2015.
That means that had it not been for the deal, the U.S. trade deficits would have been larger.
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