Korea clears first hurdle in trade uncertainty...
Preparations on follow-up negotiations
need to focus on securing practical industrial benefits
- Experts from Korea and the U.S. assessed the recent negotiations and reviewed forward-looking response measures
- U.S. Trade Experts: Investment commitments into key industries (Shipbuilding, etc.) position Korea as capable U.S. ally
- Korean Trade Experts: With the launch of negotiations on the specifics, strategic measures that reflect business realities and response measures on security issues need to be prepared
- Strategic follow-up negotiations require joint public-private “Team Korea” efforts
Korea and the U.S. reached a trade agreement on Wednesday, July 30 (local U.S. time), in the early hours of Thursday, July 31, KST. Trade experts advised that with the broad agreement in place, preparations should be made for the ensuing negotiations on the specifics to further reflect the Korean perspective. Namely, experts called for advancing measures to resolve practical bottlenecks when investing locally into the U.S. and laying the groundwork for the upcoming negotiations on security issues.
The Federation of Korean Industries (“FKI”) held “The Evolving U.S.-Korea Economic Alliance: From Tariffs to Technology & Industry Partnership” panel discussion comprised of Korean and U.S. experts at the FKI Conference Center on August 5 (Tue).
Chang-beom Kim, vice chairman and CEO of FKI, stated during his opening remarks: “Despite the relatively short time given to our negotiating team, their creative efforts have given way to reaching an agreement largely on par with other key leading economies,” adding that a phase of uncertainty that have persisted since the launch of President Trump’s second term has come to a close. Vice Chairman Kim also called for further discussions on follow-up measures, stating that “the collaborative relations between Korea and the U.S. need to go beyond tariffs, evolving toward technological and industrial cooperation.”
U.S. Trade Experts: Investment commitments into key industries
(Shipbuilding, etc.) position Korea as capable U.S. ally
The first session speakers, Jeffrey Schott, senior fellow at PIIE, and Patrick Cronin, Asia-Pacific security chair at Hudson Institute, delivered assessments and implications from the U.S. perspective.
The U.S. trade experts recognized that the investment commitments into key industries, including shipbuilding, semiconductors, and energy were key to Korea-U.S. cooperation going forward. Senior Fellow Schott stated, “I look forward to the integration of the recent investment commitments with the expansions to U.S. manufacturing, energizing two-way trade between our two countries.” Asia-Pacific Chairman Cronin remarked, “The large-scale investment commitment into key industries positions Korea as a solid and capable allied country of the U.S.
Korean Trade Experts: Expressed initial approval of the resolution of uncertainties and proposed distinct focal areas for strategic negotiations: ① Professor Myung-hee Yoo: “Establish a mutually beneficial system with the U.S. and an environment that enables Korean manufacturers to stay competitive”
② Professor Jaemin Lee: “Korea’s perspective must be fully reflected in both interpretation and implementation of key issues”
③ Senior Advisor Seokyoung Choi: “Preparations must be made for security issues, including shifts in defense costs and U.S. Forces Korea”
Session 2 comprised a panel discussion among Korean trade experts delivering assessments of the trade agreement and its implications from the Korean perspective. The experts agreed in assessing that, “The broad trade agreement has resolved the persisting uncertainties, putting a portion of market concerns to rest,” and gave their advice on ensuing measures.
Myung-hee Yoo, professor at Seoul National University Graduate School of International Studies (Former Minister for Trade of the Republic of Korea) remarked, “It is now time to devise a strategy to establish a mutually beneficial system with the U.S. and resolve on-the-ground concerns held by Korean businesses.” Professor Yoo advised, “With high U.S. tariffs and protectionism becoming the new normal, Korean businesses need to strengthen technological competitiveness and actively seek out market diversification.” Shefurther emphasized, “Korean companies are focusing on investing into the U.S., leading to concerns that Korea’s industrial base may be hollowed out. Proactive regulatory easing policies aimed at fostering an environment that enables maintaining our competitiveness in manufacturing have become more important than ever before.”
Jaemin Lee, dean of Seoul National University Graduate School of Law (Former Chair of the Trade Commission) remarked, “It is difficult to gauge the real effects of the agreement at this stage. With the launch of negotiations on the specifics, we need tight-knit strategic measures to ensure that the Korean perspective is fully reflected in the details.”
Seokyoung Choi, senior advisor to Lee & Ko LLP (Former Ambassador and Permanent Representative to the Permanent Mission of the Republic of Korea to the UN and other international organizations in Geneva) agreed with the previous speakers in assessing the current impact of the agreement. He also added, “We can expect further discussions on security issues, including on defense cost sharing and role adjustments to U.S. Forces Korea, in the upcoming Korea-U.S. summit and when drawing up ensuing joint statement. The Korean government must draw up clear and principled standards so that the Korean and U.S. perspectives may be aligned on the formation of the USD 350 billion investment fund.”
Strategic follow-up negotiations require joint public-private “Team Korea” efforts
Bong Man Kim, Chief International Network Officer of FKI remarked, “A broad set of uncertainties that has persisted since the launch of the Trump administration has now been resolved. Securing practical benefits through the coming negotiations on the specifics would be a welcome development.” He added, “The private and public sectors will join as one to form a “Team Korea” to prepare for the negotiations on the specifics. We look forward to the government heeding the voice of businesses, especially those with presence in the United States. We also trust that Korean businesses will play roles that are necessary to safeguard matters of national interest.”
※ [Attachment] Overview : Panel Discussion : Korea and U.S. Trade Experts