Confirmation that the US is seeking to renegotiate but not scrap the Korea-US free trade agreement (KORUS) is the latest sign that President Trump’s bark, at least when it comes to trade, is turning out to be worse than his bite. On the campaign trail, Trump denounced the KORUS, which came into effect in 2012, as a “job-killer” and threatened to scrap the deal. However, in a meeting between US and Korean business leaders at the start of the week, US Vice President Mike Pence struck a much more conciliatory tone, stating that although he wanted to “review and reform” KORUS, the US wanted to “work with you” and that reforms would be more about “levelling the playing field”. While it is unclear how the negotiations will proceed, they will probably involve Korea agreeing to open up more of its economy to US companies, while also agreeing to import more goods from the US. The upshot is that renegotiation will probably have a relatively small impact on the economy. (See our Weekly, “Will the Korea-US free trade agreement survive Trump?, 20th March.)
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