Amid continued ambiguity regarding the fate of the Korea-US Free Trade Agreement, some industry experts are predicting high odds that US President Donald Trump may actually terminate the trade deal, following North Korea's escalating threats, which are adding tension to the political and economic climate between South Korea and the US.
However, administration officials noted that the United States and South Korea have been in talks on revamping the pact, also known as KORUS.
"I am", Trump said in response to a question about whether he's discussing the issue with advisers.
During his visit to hurricane-hit Houston in Texas over the weekend, Trump told reporters that he would be discussing the future of the KORUS FTA in the upcoming week, hinting that he would be looking for ways to pull out of the 5-year-old trade pact.
South Korean and United States officials began talks about possible revisions to the agreement on August 22 but failed to agree on how to move forward. His remarks came after North Korea detonated a thermonuclear device in its sixth and most powerful nuclear test. No final decision has been made and Trump could remain in the agreement to see if changes are still possible, the newspaper reported, citing several people close to the process whom it didn't identify. "Withdrawing from KORUS would significantly disadvantage many successful US exporters, seriously harm many USA manufacturers and consumers, and badly undermine broader USA economic and strategic interests".
The largest U.S. business lobby urged member companies to have senior executives call the White House and other administration officials to tell them not to proceed, and to enlist Republican governors in the effort.
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Terminating the trade agreement could put a chill on relations with a key ally in the region, though Trump campaigned on ending free trade deals he said cost U.S.jobs and put USA businesses at a competitive disadvantage.
The idea of potentially withdrawing seems to have been prompted by the breakdown in negotiations between South Korean officials and the United States trade representative, Mr Robert Lighthizer, a USA official with knowledge of the situation said.
In recent days, a frustrated Mr Trump has pushed his staff to take bold action against a host of governments, including the one in Seoul, that he has accused of unfair trade practices. He pulled the US out of the Trans-Pacific Partnership agreement during his first week in office and his administration is now in talks to rewrite the 23-year-old North American Free Trade Agreement. Mr Trump said last month that Canada and Mexico are being "difficult" and he will probably need to scrap the pact.
According to data compiled by the Korea Economic Research Institute and the Korea Institute for Industrial Economics & Trade on Sunday, if the KORUS FTA is abolished, Korea's export loss to the US is expected to reach 30 trillion won ($26.4 billion) over the next five years and the loss of some 240,000 jobs.
The American business lobby group stressed that pulling out of the pact will only rupture relations between the White House and US businesses, particularly the agricultural community, citing that exports in aerospace have doubled to $8 billion thanks to the free trade pact while agricultural goods exports to Korea soared thanks to the phasing out of the double-digit tariff.
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