Revamped US-South Korea trade deal tackles pharma, currency issues

President Trump has secured his first trade deal with South Korea after the two countries agreed to revise their six-year-old trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for US autos and pharmaceuti

President Trump has secured his first trade deal with South Korea after the two countries agreed to revise their six-year-old trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for US autos and pharmaceuti

The agreement represented the first renegotiation of an existing trade deal in the Trump administration, part of a central campaign promise he made as a candidate.

Many U.S. lawmakers, particularly Democrats, had opposed the 2015 Trans-Pacific Partnership trade deal because it had a similar currency manipulation side agreement that could not be enforced.

The president said in a tweet Wednesday, the country's trade representative announced a great deal for American and Korean workers.

But Trump administration officials boasted of it as a major victory, one that "validates President Trump's visionary approach", as a senior administration official told reporters Tuesday. Trump said he would turn his attention to crafting bilateral deals.

The White House on Wednesday hailed a revamped trade agreement with South Korea as a vindication of President Donald Trump's hard-nosed approach to worldwide trade.

The deal also includes 20-year extension of the 25% USA tariff on the pickup trucks as well as doubling of the Korean import cap on the autos that meet the specifications of U.S.to 50,000 per manufacturer per year.

So what does South Korea get from the deal?

While the United States posted a trade surplus of $10.7 billion with South Korea in the services sector, it recorded a goods trade deficit of $27.7 billion in 2016, leaving an overall deficit of $17.0 billion.

While South Korea made some concessions to USA demands on the key auto trade issues, the revision of the free trade pact aligns with South Korea's own interests, experts said.

The new agreement also lays out several provisions aimed at giving American-made vehicles a competitive advantage in the Korean market.

Tight security for Harry and Meghan's wedding
The force assured residents that day-to-day policing and the response to incidents would not be affected by the Royal wedding . Meghan Markle's family will reportedly receive their very own family coat of arms ahead of her royal wedding to Prince Harry .

South Korea decamps America's new 25 percent tariff on imported steel but must receive quotas on steel exports identical to 70 percent of its average yearly shipments to the United States from 2015 to 2017. It will now end in 2041 rather than 2021. Such provisions would give the U.S.an opening to contest other nations' trade policies at will, and could even weigh on monetary policy: Japan's aggressive monetary easing, for example, has already drawn criticism from US and European officials as a form of yen manipulation.

The quota is set at 70 per cent of the average yearly steel sales to the USA from 2015 to previous year.

USA exports to Korea of agricultural goods have fallen 5.4 percent in the first five years of the Korea FTA, despite nearly two-thirds of US agricultural exports by value obtaining immediate duty-free entry to Korea under the pact.

The Asian country is still subject to the 10-percent tariff on its aluminum exports to the United States, said the officials.

The result has been to leave well over half of USA imports of both steel and aluminum clear of the new tariffs. The United States is the largest supplier of beef to Korea and trails only the European Union as the second-largest pork supplier.

When a currency is weaker, it makes exports cheaper - and more attractive - to foreign buyers. As part of the revised arrangement, the two countries also agreed to ensure that both countries don't devalue each others currencies intentionally.

Extending the tariff reflects Trump's preference for protecting USA industries rather than lowering overall trade barriers.

But the devil is in the detail.

Washington's Treasury Department was now in talks to produce a side agreement to prohibit "competitive currency devaluation" which had yet to be finalized, the official said. Including it in the text of the deal would have required a lengthy legislative approval process, a path that administration officials indicated they did not want to go down.

Recommended News

  • Organization slated to host Easter egg hunt Saturday

    Organization slated to host Easter egg hunt Saturday

    Clockwise, from left, are Alex Tomlinson, Kristi Hulsey, Amanda Stillwell, Melissa Biehl, Shannon Holbrook and Jessica Lee. While 85 per cent give chocolate eggs to their kids, leaving us feeling a bit sorry for the other 15 per cent.
    Popular Serial Subject Adnan Syed Has Been Granted A New Trial

    Popular Serial Subject Adnan Syed Has Been Granted A New Trial

    Maryland Attorney General Brian Frosh's office said that it is "currently reviewing today's decision to determine next steps". The podcast "was enormously helpful" in garnering support for Syed, his lawyer Brown said at a press conference Thursday.
    (MSFT) Shares Sold by Fiduciary Management Inc. WI

    (MSFT) Shares Sold by Fiduciary Management Inc. WI

    Microsoft Corporation (NASDAQ:MSFT) now has a Weekly Volatility of 3.94% percent while its Monthly Volatility is at 2.41% percent. Finally, Jackson Grant Investment Advisers Inc. boosted its position in shares of Microsoft by 0.3% in the second quarter.
  • Jeremy Corbyn embroiled in new anti-Semitism row

    Jeremy Corbyn embroiled in new anti-Semitism row

    They said he was the figurehead of an anti-Semitic culture based on conspiracy theories and obsessive hatred of Israel . Most recently, it emerged that Corbyn himself had supported a mural replete with antisemitic imagery.
    Nvidia develops virtual testing platform for self-driving cars

    Nvidia develops virtual testing platform for self-driving cars

    Uber isn't the only company affected by this incident; the fatality puts heavy scrutiny on other autonomous vehicle initiatives. The server sends driving commands back to the simulator, completing what the company calls the "hardware-in-the-loop cycle".
    Trump's approval rating is *this* close to Obama's and Reagan's

    Trump's approval rating is *this* close to Obama's and Reagan's

    It seems that the president now has the highest approval rating in 11 months. The poll has a margin of error of 3.7 percentage points.
  • 'Chief plotter' Warner will not captain Australia in future: CA

    'Chief plotter' Warner will not captain Australia in future: CA

    All three players will, however, be permitted to play club cricket "to maintain links with the cricket community". South Africa opener Hashim Amla took no delight in the enforced omission of Australia's shamed trio.
    No suggestions of ball tampering during Ashes - Broad

    No suggestions of ball tampering during Ashes - Broad

    Smith admitted the ploy had been devised by the team's "leadership group" - a body of Australia players whose identity has yet to be revealed.
    GMC Plans To Spread AT4 Spec Across Its Lineup

    GMC Plans To Spread AT4 Spec Across Its Lineup

    Mud terrain-rated Goodyear Wrangler DuraTrac tires or 20-inch wheels with all-terrain tires also will be available. Dark tinted and textured aluminum trim can be found on the steering wheel, center stack, and sill plates.
  • Trump announces via Twitter VA Secretary David Shulkin fired

    Trump announces via Twitter VA Secretary David Shulkin fired

    Little is known about Dr Jackson's policy positions, but Mr Trump could have nominated an outrightly pro-privatisation candidate. Either way, lawyer Robert Wilkie is now the acting Secretary of Veterans Affairs until the decision is actually made official.
    Newman's huge OT powers KU to Final Four

    Newman's huge OT powers KU to Final Four

    Of the four teams still in the tournament, KU spent the most on its men's basketball team last school year at $11.13 million. Any way you count it, the Wildcats' decade of dominance has turned their blood as blue as their "V" logo. "Good weather.
    Matthew Renshaw added to Australian squad for fourth Test against South Africa

    Matthew Renshaw added to Australian squad for fourth Test against South Africa

    The Aussie team is due to play the final Test against South Africa in Johannesburg that starts on Friday. No action has been taken against Darren Lehmann who will continue to coach the team.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.