Six year old free trade agreement overhauled by United States and South Korea

The new deal doubles- to 50,000- the cars each US automaker can export annually to South Korea

The new deal doubles- to 50,000- the cars each US automaker can export annually to South Korea

Senior US officials on Tuesday gave details on an agreement in principle with South Korea to revise a trade deal that originally went into effect in 2012.

The countries agreed to extend US tariffs on pickup trucks from South Korea to 2041 from the current 2021 and increase the number of cars manufactured in compliance with USA safety standards that can be sold in South Korea from 25,000 to 50,000 per maker.

The agreement, cobbled together quickly with only a few rounds of negotiations under Trump's threat of withdrawal, will include a side-letter that requires South Korea to provide increased transparency of its foreign exchange interventions, with commitments to avoid won devaluations for competitive purposes.

Many U.S. lawmakers, particularly Democrats, had opposed the 2015 Trans-Pacific Partnership trade deal because it had a similar currency manipulation side-agreement that could not be enforced. Comparing the fifth year of the FTA to the year before it went into effect, US poultry producers have faced a 78 percent collapse of exports to Korea - a loss of 82,000 metric tons of poultry exports to Korea.

The auto sector is among the most contentious issues in South Korea's trade dealings with the U.S. The Korean Automobile Manufacturers Association praised the government's efforts to protect South Korean automakers and avoid major changes on sensitive issues such as adjusting tariffs. US carmakers have accused South Korea of manipulating its currency at times to keep South Korean vehicles priced at artificially lower levels than USA goods. This is a "big win for US truck producers and the workers", said one of the officials. However, no American auto brand sold more than 10,000 vehicles in South Korea past year. South Korea imported $340 million of Nebraska agricultural products that year. I have been outspoken about the value of the South Korean market to Nebraska's high-quality agriculture products.

The auto sector was among the hardest hit: The U.S. trade deficit with Korea in motor vehicles grew 55.7 percent in the pact's first five years.

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"That is why, in September, I began advocating to stay in the KORUS FTA and visited with both USA administration officials and South Korea officials to stress the importance of the trade relationship between our two countries".

South Korea will not receive an exemption on their aluminum exports, the official added, which will be subject to a 10 percent tariff.

On March 8, vowing to protect the USA steel and aluminium industry in the name of national security, Trump signed proclamations to impose a 25 per cent tariff on imported steel and a 10 per cent tariff on aluminium.

South Korea will not be subject to the broad 25% tariff that Trump has imposed on most other countries.

South Korea also agreed to amend a government health program that pays premium prices to domestic drug companies in order to ensure a level playing field for U.S. pharmaceuticals producers, the United States officials said.

In addition to the increased access for American vehicles that meet USA but not necessarily South Korean safety standards, the US officials also said they won reductions in non-tariff barriers to USA vehicle sales, including elimination of duplicate environmental testing requirements and recognition of USA replacement parts standards.

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