SEOUL: The biggest foreign business group in South Korea said Tuesday it supported a trade deal between Seoul and Washington that US President Donald Trump has threatened to abandon, warning of a “damaging effect” on the economy if it is scrapped.
Trump has slammed the five-year-old US-Korea free trade agreement (FTA), known as KORUS, as a “horrible deal” and a “job killer”, and said he would discuss the possible withdrawal from it with his aides this week.
“It’s very much on my mind,” he said.
Tensions are high following North Korea’s sixth nuclear test and a series of missile launches, and his comments sparked concerns about the decades-old alliance between Seoul and Washington.
The American Chamber of Commerce in Korea (AMCHAM), which serves about 700 businesses in the country, warned withdrawing from the pact will have a “severe damaging effect on the economy” and lead to a “deterioration” of ties.
The trade deal has had a “positive influence” on both economies and most of its members had seen “noteworthy benefits”, it said, making clear: “The American Chamber of Commerce in Korea supports the ongoing implementation of the KORUS FTA.”
“Now is the time to further solidify the US-Korea alliance given the continued provocation from North Korea,” it added.
Trump’s push to revise the deal is part of his wider drive to cut his nation’s trade deficits with a number of countries including South Korea, a key Asian ally.
The US is the South’s second-biggest trading partner after China.
The US trade deficit with the South has more than doubled since the pact took effect in 2012, from $13.2 billion in 2011 to $27.6 billion last year, according to US data.
AMCHAM said US exports rose more than 20 percent in the first half of this year, adding: “It appears that the trade deficit is declining.”
The automobile sector accounted for 80 percent of the US trade deficit with South Korea, it added.