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Trade imbalances between Seoul, Washington could worsen without FTA: business leaders

Business leaders from South Korea and the United States met in Washington to seek a "win-win" partnership ahead of a planned talks to amend their five-year-old free trade pact, a local business lobby said Wednesday.

At the 29th Joint Conference of Korea-U.S. Business Councils held in Washington on Tuesday (U.S. time), 30 members of the South Korean delegation and 40 representatives from the U.S. side discussed pending economic issues such as the upcoming renegotiations of the bilateral free trade agreement (FTA) that took effect in March, 2012 and the spread of protectionism in global markets, the Federation of Korean Industries (FKI) said in a statement.

"The Korea-U.S. trade pact has served as a platform to expand bilateral trade and investment and created new business opportunities for both countries," the two sides said in a joint statement.

The U.S.-Korea relationship is supported by two pillars: their mutual defense treaty and the open trade pact (known as KORUS). Breaking the pact would have broader geopolitical ramifications at a critical time for Korean and U.S. security, and it would damage the bilateral relationship, the statement said.

"The causes of the U.S. trade deficit with Korea are macroeconomic in nature and are not attributable to KORUS. Most notably, weak consumption in Korea caused total imports from 2012-2016 to fall by 22 percent, while U.S. goods exports to Korea overall largely held their ground during that same period," it said.

The U.S. International Trade Commission has pointed out that the deficit would be substantially worse without KORUS, making it clear to the council that withdrawal from the arrangement would undermine the U.S. government's goals of deficit reduction.

After expressing concerns about a series of protectionist moves recently taken or to be taken by the U.S., the Korean delegation called on their U.S. counterparts to join forces to come up with a more "win-win, reciprocal" trade pact through renegotiations, it said.

In the past five years, Korean companies such as Hyundai Motor Co. and Kia Motors Corp. have generated 11,000 jobs in the U.S. through their investments in production facilities, the FKI said.

Korean firms invested a combined $67.8 billion in the U.S. from 2011-2016, while U.S. investments in Korea stood at $22.5 billion, according to the U.S. Bureau of Economic Analysis.

Source: Yonhap

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