SEOUL”•South Korean business leaders voiced alarm Friday after US President Donald Trump said he might tear up a free trade agreement with Seoul, warning the deal was a “major pillar” of the allies’ ties.
The US was only recently overtaken by China as the world’s biggest trader in goods, but Trump regularly attacked trade pacts on the campaign trail”•raising concerns in Asia’s fourth-largest economy.
He has threatened to withdraw from the Nafta continental trade pact with Canada and Mexico if renegotiations do not produce a “fair deal.”
The issue of the South Korean deal, which went into effect in 2012, appeared to have been put on the back burner in his first 100 days in office.
But in an interview published Friday he told Reuters news agency that he would renegotiate or terminate the agreement.
“It is unacceptable, it is a horrible deal made by Hillary,” he said, referring to his Democratic opponent in the race for the White House, Hillary Clinton.
The FTA was initially negotiated by the Republican administration of ex-president George W. Bush, and Clinton promoted it as secretary of state before it was approved by Congress in 2011.
South Korea’s top business group”•whose members include the country’s biggest manufacturers”•immediately rebuked Trump, warning of the risk of rising protectionism.
“We worry that President Trump’s remarks over the Korea-US trade agreement may trigger the spread of global protectionism,” the Federation of Korean Industries said in a statement.
“The agreement should remain firmly in place as a major pillar of bilateral ties,” it said, adding it hoped for “constructive dialogue” between the two allies.
Seoul’s trade ministry was planning to look into circumstances of Trump’s comment, Yonhap news agency cited a ministry official as saying, adding Washington has not made any official move to renegotiate or terminate the pact.
Two-way trade rose from $100.8 billion in 2011, the year before the FTA went into effect, to peak at $115.5 billion in 2014, although it has since declined to $109.7 billion last year, when the South recorded a trade surplus of $27.7 billion.
South Korean automakers including Hyundai are seen as major beneficiaries, with car exports to the US growing by an annual average of 12.4 percent from 2012 to 2016.
But US car exports to the South grew by 37.1 percent a year over the same period, according to the Korea International Trade Association.