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Trump Will Not Likely Focus On South Korean Trade Issue For Now

By February 23, 2017 at 7:31 am
The US is working closely with South Korea for the deployment of the Terminal High Altitude Area Defense (THAAD) missile system. (Photo : News Nation)

The US government will likely set aside its trade issues with South Korea for a while as Washington is more focused on security concerns in northeast Asia, according to a report released Thursday.

The state-run Korea Development Institute (KDI) said in a report that round-table talks were held in Seoul last week in which the future of northeast Asia and the Korean Peninsula in the Trump era was discussed. It was attended by researchers and experts from several think tanks such as the Korea Institute for International Economic Policy (KIEP).

Since US President Donald Trump took office in January, South Koreans have been concerned about the likely renegotiation of the US-South Korean free trade pact and Washington's tagging of Seoul as a currency manipulator based on Trump's previous declarations.

The US, however, has not taken any immediate action against South Korea.

The US has been considering designating some of its major trading partners such as China and Japan as currency manipulators, due to these countries' massive trade surpluses against the US.

Bank of Korea Governor Lee Ju-yeol believes it is not likely that South Korea will be named a currency manipulator by the US government, although Washington may change the criteria it uses to monitor the currency.

South Korea's current-account surplus has been due to lower imports because of cheap oil and depressed domestic demand, Lee said. That surplus is considered by the US as one of the factors to look at when compiling the watch list.

Korea is already taking steps to trim its trade surplus with the US, but any changes will be gradual as around half of the economy relies on exports.

A KIEP researcher said that South Korea's geopolitical importance will make the US government become more prudent in discussing the trade issue. The report cited the overseas trip of US Defense Secretary James Mattis to South Korea earlier this month.

South Korean officials are in close talks with their American counterparts on the deployment of the Terminal High Altitude Area Defense (THAAD) missile system, resulting to a strong protest from China. 

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