Last week, the two nations agreed to begin the long-anticipated process of amending the FTA at Washington's request. US President Donald Trump has blamed the five-year-old deal for America's growing deficit in goods trade with South Korea. But Seoul has argued the deficit would be larger without the deal and called for a joint review of its impact on the two economies.
"We entered into negotiations (with the US)... taking all possibilities into consideration, including the case of negotiations falling apart," Trade Minister Kim Hyun-chong said during a parliamentary audit.
"At the negotiating table, I deal with security and trade separately. We need to enter into trade negotiations with a business-like mind to maximize national interests."
During his meeting with US Trade Representative Robert Lighthizer and senior policymakers in Washington last week, Kim said he explained the mutual benefits of the deal, and they agreed that the FTA should be maintained at a time when a robust alliance is needed to deal with rising threats from North Korea.
|South Korea`s trade minister Kim Hyun-chong speaks during a parliamentary audit at the National Assmebly on Oct. 13, 2017. (Yonhap)|
"I've already explained in the second talks that the US trade deficit was attributable to its macro and micro economic policies, not just because of the KORUS FTA," the former chief negotiator for the KORUS said. "They said the KORUS FTA should be maintained at this point, whether that's for economic reasons or security reasons."
As a way to reduce America's trade deficit, Kim said South Korea could buy more shale gas or weapons from the US.
The trade ministry said working-level consultations have been under way between the two nations to coordinate the list of terms, which will be discussed when Trump visits South Korea next month as part of his Asia trip. His summit with President Moon Jae-in is expected to focus on North Korea and trade issues.
The ministry said it would soon review the domestic procedures needed for a revision, such as carrying out an economic feasibility study, holding public hearings and submitting reports to parliament.
Besides renegotiating the FTA with the US, Kim also faces a daunting task to protect local companies from rising protectionist measures by China, its largest trading partner.
South Korean retailers and tour agencies have suffered regulatory hurdles and unfavorable business sentiment following Seoul's deployment of an advanced missile system in March despite Beijing's opposition.
Major retailers -- Lotte and Shinsegae -- have closed their shops in China following huge operating losses and opaque business outlook, and tour agencies were hit by a huge plunge in the number of Chinese travelers this year.
Opposition lawmakers accused the government of not taking enough actions on the global stage, pointing to the government dropping plans to raise the issue during a service council meeting of the World Trade Organization earlier this month.
Kim said the decision was made as talks were under way between the two nations to extend a currency swap deal worth 64 trillion won ($55 billion), which was reached Friday. Taking the issue to the WTO is still a viable option, he said.
"We haven't given up filing a complaint (with the WTO). I think we still have the option on the table," the former lawyer who served on the WTO Appellate Body from 1999-2003 said, adding several law firms and experts have said Seoul has a legitimate case. (Yonhap)