Is the Korea-U.S> FTA Really So Bad for the U.S. Economy?

Abstract

It is likely that the five-year-old Korea-US free trade agreement (FTA), also referred to as the KORUS, will be officially renegotiated sooner or later as U.S. President Donald Trump and South Korean President Moon Jae-in have reaffirmed that economic cooperation and sustainable trade are an important pillar of their alliance and agreed to expedite talks on the bilateral FTA during President Trump's visit to Seoul. In fact, Washington has initiated talks to revise the agreement when United States Trade Representative (USTR) Robert Lighthizer raised in July the issue of removing barriers to U.S. trade. In particular, President Trump has threatened to terminate the KORUS, which he claims has been devastating for the American economy, unless Korea concedes better terms to the United States, citing how the termination process of the agreement is simpler than for the NAFTA. Is the KORUS a horrible and unacceptable deal for the U.S., as Mr. Trump claims? Is the Korus really bad for the U.S. economy?