Trump's First Trade Deal: The Slightly Revised Korea-U.S. Free Trade Agreement

6 Pages Posted: 4 Jan 2020

See all articles by Simon Lester

Simon Lester

Cato Institute

Inu Manak

Council on Foreign Relations

Kyounghwa Kim

Korea International Trade Association

Date Written: June 13, 2019

Abstract

While the renegotiation of the North American Free Trade Agreement has received far more attention, a lesser-known U.S. trade deal has also been reworked. In April of 2017, President Trump proclaimed his displeasure with the Korea-U.S. Free Trade Agreement (commonly referred to as “KORUS”), stating, “It was a Hillary Clinton disaster, a deal that should’ve never been made.” Trump said he had told the South Koreans, “We’ll either terminate or negotiate. We may terminate.” This set the wheels in motion for a relatively low-profile trade renegotiation that became Trump’s first trade deal.

The renegotiation of KORUS provides a useful example of Trump’s trade dealmaking in practice. As we will show below, the renegotiation made only minor changes to the agreement and could be taken to mean that the reality of Trump’s trade policy may not always match the rhetoric. However, the administration’s concerns about trade with Korea have always been less prominent than its concerns about trade with other trading partners, so the conclusion of the KORUS talks with only small changes may simply be a reflection of the administration’s focus on other areas of trade policy rather than an indication of its general approach to trade policy.

Keywords: KORUS, Korea-U.S Free Trade Agreement, US-Korea, foreign relations, Trump foreign policy, U.S.-Korea, Trade Expansion Act of 1962, Premium Pricing Policy for Global Innovative Drugs, Comprehensive and Progressive Agreement for Trans-Pacific partnership, ISDS, World Trade Organization, WTO

JEL Classification: E6, E61, F00, F10, F1, F13, F15, F16, F20, F5, F50, F52, F53, F55

Suggested Citation

Lester, Simon and Manak, Inu and Kim, Kyounghwa, Trump's First Trade Deal: The Slightly Revised Korea-U.S. Free Trade Agreement (June 13, 2019). Cato Institute Free Trade Bulletin, No. 73, Available at SSRN: https://ssrn.com/abstract=3502409

Simon Lester (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

Inu Manak

Council on Foreign Relations ( email )

1777 F Street, NW
Washington, DC 20006
United States

Kyounghwa Kim

Korea International Trade Association ( email )

Seoul
Korea, Republic of (South Korea)
82-2-6000-5954 (Phone)

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