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(LEAD) Seoul asks Washington to consider exporters' woes after scrapped Iran sanctions waiver

All News 10:40 June 10, 2019

(ATTN: UPDATES with Hong's meeting with IMF chief and the G-20 communique in last 8 paras)

SEJONG, June 10 (Yonhap) -- South Korea's finance minister has called for positive U.S. consideration in resolving difficulties facing smaller South Korean companies due to U.S. sanctions on Iran, the finance ministry said Monday.

Hong Nam-ki, the minister of the economy and finance, made the request during his meeting with U.S. Treasury Secretary Steven Mnuchin on Sunday on the sidelines of an annual meeting of the Group of 20 finance ministers in Japan.

Hong Nam-ki (L), the minister of economy and finance, shakes hands with U.S. Treasury Secretary Steven Mnuchin at a hotel on the sidelines of an annual meeting of the Group of 20 finance ministers in Japan on June 9, 2019, in this photo provided by the ministry. (PHOTO NOT FOR SALE) (Yonhap)

Mnuchin said he hopes the issue can be resolved smoothly through close consultations between South Korea and the United States, the Ministry of Economy and Finance said, without elaborating.

Last year, Washington imposed the most biting sanctions ever on Iran following its exit from a 2015 nuclear agreement with Iran and five major world powers.

Last month, the U.S. ended its sanctions waivers for South Korea, China, India and five other countries for Iranian oil imports, prompting Seoul to diversify its sources of oil imports.

Smaller South Korean exporters also face difficulties as they have stopped their exports to Iran due to the U.S. sanctions on Iran, the ministry said.

The ministry declined to say how many South Korean companies are affected by the U.S. sanctions.

Last week, Hong met with Iran's central bank governor, Abdolnaser Hemmati, in Seoul, and the two sides agreed to closely communicate to address difficulties facing South Korean companies.

Separately, Hong met with International Monetary Fund (IMF) Managing Director Christine Lagarde on Saturday in Japan and the two shared the view that South Korea needs an expansionary fiscal policy to boost economic growth and deal with growing downside risks.

In May, the IMF said South Korea's fiscal policy should remain expansionary in the medium term to support growth, job creation and external rebalancing.

Hong stressed that the South Korean government is pushing for a parliamentary approval of a 6.7 trillion-won (US$5.6 billion) extra budget bill to boost the economy.

Still, it remains unclear when South Korea's parliament could vote on the extra budget bill due to a political standoff over the ruling party's attempt to fast-track four major bills, including one on electoral reform.

Lagarde also stressed the need for the rules-based trading system, citing the negative effects of escalating trade frictions between the U.S. and China on the world economy.

At the annual meeting of the Group of 20 finance ministers in Japan that ended on Sunday, Hong called for efforts of the G-20 advanced and emerging economies to strengthen policy coordination to ensure that trade frictions do not spread to emerging countries.

The G-20 finance ministers said global growth appears to be stabilizing and is generally projected to pick up later this year and into 2020.

"However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks, and stand ready to take further action," the G-20 finance ministers said in a communique.


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