Non-Event: 'Revised' Korea-US FTA

♠ Posted by Emmanuel in , at 3/29/2018 02:07:00 PM
This isn't newsworthy at all. News about Trump's trysts with porn stars actually matters more.
You may be wondering why I haven't written anything at all about the so-called 'revised' Korea-US Free Trade Agreement (KORUSFTA). The main reason is that there have been very few changes, and these changes are next to inconsequential anyway. As you know, the main bone of contention of the Trump administration has been how Korean auto exports heading America's way have been far greater than those going in the opposite direction. So, it was inevitable that autos would be the main point of discussions.

What's actually been reported is quite laughable and does not address the main problem here: American cars remain largely unsuitable for the Korean market (or most of the Asian car markets, for that matter). As such, it is rather pointless to increase the cap for Korean importation of cars from the United States when the old cap was far from being reached anyway:
Under the terms of the draft agreement, the US was able to secure improved market access and eased import restrictions for automobiles. In 2016, the US deficit in the sector alone was US$24 billion – nearly 90 percent of the total goods deficit, according to a USTR statement from October 2017. The deal will allow US automakers to export 50,000 vehicles that do not comply with domestic safety regulations per manufacturer each year to Korea – double the figure previously agreed under KORUS. These vehicles do meet US safety standards and would be treated as such. 

[Korean Trade Minister Hyun-chong] Kim said that he expected minimal impacts on the import volume from this concession, given that the existing threshold has not been met for six years and Ford and General Motors shipped less than 10,000 units apiece to Korea under the allowance last year [2017 my emphasis].
Given that light trucks like pickups are the most saleable and profitable segments of the US auto industry, the deal is reportedly amended to make it harder for Korean automakers to sell such vehicles Stateside:
The US further extended its 25 percent duty on Korean pick-up trucks until 2041, 20 years later than permitted under the deal’s previous timeframe, according to the Korean Ministry of Trade, Industry and Energy. "We reached an agreement by accepting some of the US demands in regard to market access," Kim said. "We took consideration of the fact that no companies are currently exporting domestically-produced pickup trucks to the US.”
This was a big so-what since Korean automakers make no pickups anyway. However, in exchange for these so-called concessions, the Koreans actually got something substantial. That is, they don't need to increase the share of American parts their US-bound exports contain:
Korean negotiators were able to avoid higher content requirements for US auto parts, officials say.
So contrary to what Trump said, this is essentially the same deal for American workers for better or worse. As I said, it's a non-event.