S. Korea, U.S. redo trade deal

Kia, Hyundai workers slam tariff extension on pickups

Hyundai Motor Co. Santa Fe sport utility vehicles are on display during a launch event for the updated vehicle in Goyang, South Korea, in February. Union autoworkers at Hyundai Motor Co. and Kia Motors Corp. in South Korea are protesting a revised trade agreement with the U.S.
Hyundai Motor Co. Santa Fe sport utility vehicles are on display during a launch event for the updated vehicle in Goyang, South Korea, in February. Union autoworkers at Hyundai Motor Co. and Kia Motors Corp. in South Korea are protesting a revised trade agreement with the U.S.

WASHINGTON -- President Donald Trump has secured his first revamp of a U.S. trade deal, after reaching an agreement this week with South Korea that would allow American automakers greater access to that country's markets, senior administration officials said late Tuesday.

The agreement comes as the U.S. has been involved in renegotiating the North American Free Trade Agreement with Canada and Mexico and has imposed tariffs that have roiled financial markets.

Seoul has agreed to double to 50,000 the number of cars each U.S. automaker can sell in the Asian nation without meeting local safety standards, said the officials, who briefed reporters on condition of anonymity. However, it's not clear how the higher cap will immediately benefit American manufacturers, given that sales by American automakers currently fall well short of the new limit.

Under the revamped U.S.-Korea Free Trade Agreement, the U.S. will extend a 25 percent tariff on imports of pickups until 2041. The tariff was set to expire in 2021 under the existing trade agreement, which came into force in 2012.

Meanwhile, South Korea agreed to limit its steel exports to the U.S. to about 2.7 million tons a year, in exchange for relief from the 25 percent tariff Trump announced earlier this month.

Many of the details of the revised trade deal and the steel quota were previously disclosed by South Korea.

The deal removes a key economic irritant as the allies prepare for high-stakes meetings on North Korea. In the coming weeks, Trump and South Korean President Moon Jae-in are planning separate meetings with North Korea's Kim Jong Un.

South Korea also agreed to eliminate nontariff barriers such as certain environmental testing requirements and recognize U.S. standards on auto parts, according to the officials.

The agreement is Trump's first revised trade pact since taking office. Trump has slammed existing trade agreements with several countries, regularly singling out the 6-year-old trade deal with South Korea.

South Korea's trade surplus with the U.S. was about $18 billion last year, down from $23 billion in 2016, according to the Korea International Trade Association. Cars accounted for more than 70 percent of the value of the surplus.

South Korea was one of several countries that received an initial exemption from broad U.S. tariffs on steel and aluminum last week.

In Seoul, unions at South Korea's two largest automakers, Hyundai Motor Co. and Kia Motors Corp., blasted the plans to revise the trade deal with the U.S., saying earlier in the day that the amended deal will prevent South Korean automakers from entering the fast-growing U.S. pickup market.

"It is a humiliating deal that accepts Trump's strategy to pre-emptively block South Korean pickup trucks," Hyundai Motor's labor union said in a statement.

The union also complained that the government gave in to Trump at a time when the American market represents big opportunities. Big U.S. automakers are trying to "kill the South Korean auto industry," it said.

Kia's labor union said it shares that view.

Hyundai said in a statement that it hoped the two governments would work together for further development of the automotive industry.

Information for this article was contributed by Toluse Olorunnipa, Andrew Mayeda, Ben Brody, Jiyeun Lee, Andrew Mayeda, Kanga Kong, and Jiyeun Lee of Bloomberg News and by Youkyung Lee of The Associated Press.

Business on 03/28/2018

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