Trade has been a topic of heavy debate in the United States lately.
After President Trump promised to renegotiate current trade deals so the United States economy could heal, liberals were worried about what may come from such a deal.
But now, heads are turning at how successful Trump’s big trade negotiation truly was.
Renegotiation of the KORUS trade deal between the United States and South Korea is in its initial phases, though many administrative officials claim it is “innovative.”
Details of the deal were released to reporters earlier this week via a phone briefing, and several government officials offered their praise of the deal.
The new deal is a vision for the future, and will be known throughout history as a “very big deal” in Trump’s presidential history, according to one government official.
One of the officials said that this deal “underscores a pattern of failure by previous administrations to negotiate fair and reciprocal trade deals that benefit both countries.”
One official declared that “the President was correct to undertake this renegotiation. He was able to make it a better deal and win concessions that should have been won before and to take advantage of … to create and take advantage of leverage in this situation in a way that helps U.S. workers and businesses.”
President Donald Trump directed the U.S. Trade Representative (USTR) to renegotiate the deal. USTR did so in coordination with other U.S. agencies.
Officials hailed the new deal as a “big win for American companies and American workers.”
The KORUS trade agreement between the two countries was negotiated under the George W. Bush administration but did not have enough support from Congress and stakeholders at the time. After some renegotiation under the Obama administration, the deal finally had enough support to go into effect in March 2012. Trump officials described the result of the deal as not performing as expected and even in some cases “disastrous.”
One of the biggest problems under KORUS has been U.S. automobile exports. Roughly 80 percent of the trade deficit in goods with South Korea is attributable to autos and auto parts, according to the officials, one of whom identified autos and trucks as a “core driver of the deficit.”
Under the new deal negotiated by the Trump administration, the U.S. will extend a 25 percent tariff on imports of pickup trucks to the U.S. until the year 2041. This is a “big win for U.S. truck producers and the workers,” said one of the officials. Over the past five to six years of the KORUS agreement, U.S. exports of automobiles to South Korea, those built to U.S. safety standards, were capped at 25,000 per manufacturer, per year. An official said this created an economies of scale problem. Under the new agreement, that cap has been raised to 50,000.
The new agreement also reduces some of South Korea’s regulatory burdens to trade of automobiles and auto parts as well as some labeling regulations. One official said the changes will “create a suite of outcomes that are going to make it a lot easier for our auto companies to compete on a level playing field there in Korea.”
There will also be changes to emissions standards in South Korea that will take U.S. regulations into account.
Implementation issues associated with the previous trade deal will also be improved upon and utilized, such as better inspection programs when crossing customs.
Do you believe this new trade deal is revolutionary?
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