Korea trade talks must walk fine line amid threat

Balance is between Trump’s domestic agenda and containing a nuclear-armed North

The United States and South Korea on Friday completed the first round of review talks on a bilateral trade deal with Washington saying there was “much work to do” to reach a new pact.

Since taking office in 2017, President Donald Trump has pulled the United States out of talks on a 14-nation AsiaPacific trade pact, started negotiations on a new deal for the North American Free Trade Agreement between the US, Mexico and Canada and started a review of the 2012 Korea deal.

Washington has taken a hard line in the Nafta talks, which appear stalled with just two rounds of negotiations left, saying that concessions are the only way for Canada and Mexico to keep the deal.

The Korea trade talks will have to strike a balance between Trump’s domestic agenda and the need to contain a nuclear-armed North Korea. A swift agreement would have aided that, officials from both sides said ahead of the talks on Friday. The US goods trade deficit with South Korea has doubled since the 2012 signing of the US-Korea Free Trade Agreement (KORUS). Almost 90 per cent of the 2016 shortfall of $27.6 billion (Dh101.3 billion) came from the auto sector, an issue the United States is expected to press hard in the Washington talks.

A quick deal could give Trump his first trade victory at a time when Nafta negotiations are dragging on and pressure on China to change trade practices has yielded little progress.