South Korea’ top trade negotiators on Friday struck a cautious tone over the prospect of finalizing a tariff agreement with the US, before US President Donald Trump visits Korea for the APEC summit next week.
Just a day after returning from Washington following a new round of tariff talks with US Commerce Secretary Howard Lutnick, Industry and Trade Minister Kim Jung-kwan said that the two sides remain sharply divided over key terms of Seoul’s proposed $350 billion investment in the US.
Their disagreements center on the size of the cash contribution and whether the investment should be made in installments, in exchange for Washington lowering tariffs on South Korean products to 15% from 25%.
“South Korea’s position is that the cash portion should be reduced, while the US maintains that it should be larger. The difference in positions remains significant,” he told lawmakers before the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee for a government audit.
His comments dampened expectations that the two countries would reach a long-delayed tariff deal before their leaders meet in South Korea next week for the APEC summit in Gyeongju and issue a joint statement on the agreement during their bilateral meeting scheduled for Oct. 29.
MUTUALLY SATISFACTORY TERMS
Asked about the two leaders could make a joint statement at the APEC meeting, Kim said: “It is difficult to predict and I cannot be confident about the possibility.”
“We have not yet reached mutually satisfactory terms on several issues,” he told lawmakers.
Kim Yong-beom, policy chief at the presidential office, echoed the trade minister’s remarks, casting doubt on the likelihood of striking a tariff agreement with the US by next week.
“APEC is just around the corner and time is running out,” he told reporters upon return from Washington on Thursday, together with Trade Minister Kim. “If anyone expects a breakthrough around the APEC, there is a long way to go.”
SLIGHT RETREAT FROM INITIAL DEMAND
Washington has reportedly asked Seoul to commit $200 billion in cash over the course of eight years, or about $25 billion a year. The proposal marks a retreat from its initial demand for full upfront payment in cash of $350 billion.
Minister Kim did not confirm the figure directly, but acknowledged that the two sides made such discussions.
He added the two countries are also still discussing on how to share profits from US investments and select investment targets.
The minister reiterated the negotiations are centered on three principles: alignment of the two countries’ interests, commercial feasibility of projects tied to the investment and minimizing the impact on South Korea’s financial and foreign exchange markets.
By Ji-Eun Ha
hazzys@hankyung.com
Yeonhee Kim edited this article.
