Washington: A working-level South Korean trade delegation is currently visiting the United States to discuss the specifics of a framework trade deal that the two nations reached in late July, according to Seoul's trade officials. The discussions are anticipated to cover the investment package proposed by Korea and issues concerning non-tariff trade measures.
According to Yonhap News Agency, the South Korean delegates are meeting with officials from the U.S. Trade Representative's office and the Department of Commerce. The trade agreement, reached on July 30, involves the Trump administration's commitment to reduce its reciprocal tariff rate for South Korea to 15 percent from the initially proposed 25 percent. Additionally, tariffs on Korean cars are to be reduced to 15 percent from the current 25 percent.
In exchange, South Korea has pledged to invest a combined $350 billion in the U.S. for cooperation in shipbuilding, semiconductor, battery, and other advanced industries. Additionally, South Korea has agreed to purchase $100 billion worth of American energy products.
The two parties have been attempting to resolve differences over the proposed investment's details, including its composition, financing methods, and profit-sharing arrangements, as well as matters related to non-tariff trade measures. South Korean officials have indicated that the planned investment will primarily consist of loans and credit guarantees, whereas the U.S. is reportedly advocating for direct investment.
The U.S. is said to be urging Korea to act on its investment plan, using the yet-to-be-implemented lowered auto tariffs as leverage. Last week, the Ministry of Trade, Industry and Energy submitted a record-high budget proposal of 13.88 trillion won ($10 billion) for the following year, earmarking 1.9 trillion won for financing industrial cooperation projects with the U.S.
Furthermore, the Trump administration is reportedly pressuring Korea to address what it considers "non-tariff trade barriers" in the agro-livestock and digital sectors. As part of the trade deal, the Seoul government agreed to enhance cooperation with the U.S. regarding its sanitary and phytosanitary procedures for American agricultural products.
Last month, Korea's agriculture minister announced plans to establish a U.S. desk within the Animal and Plant Quarantine Agency to improve communication with the U.S. on these matters. The ongoing trade discussions are expected to address other trade barrier issues not covered in the framework agreement, such as Seoul's proposed regulations on online platforms, restrictions on high-precision map data exports, and an import ban on U.S. beef from cattle aged 30 months or older.
During a trade strategy meeting held on Monday, Trade Minister Yeo Han-koo stated that the government aims to minimize the impact of U.S. tariffs on Korean companies and protect national interests in sensitive areas during trade talks with the U.S.