Asia Society Report: How the U.S. and Korea Can Advance Economic Ties
WASHINGTON, D.C., January 23, 2019 — A new issue paper, published today by the Asia Society Policy Institute (ASPI), presents a range of concrete actions that the United States and South Korea can take to advance and strengthen their bilateral economic relationship following the recent amendments to the U.S.-Korea Free Trade Agreement (KORUS).
The paper breaks down the challenges and opportunities in the bilateral relationship in the areas of trade and investment, energy, digital economy and advanced technologies, infrastructure, and women's economic empowerment. Wendy Cutler, Vice President of ASPI and former Acting Deputy U.S. Trade Representative, and Hyemin Lee, former G20 Sherpa and Ambassador for International Economic Affairs for South Korea authored the paper, which was made possible by a grant from the Korea Foundation.
“This is an opportune moment for these two economies to work closely together,” said Cutler, who led the negotiations in the initial KORUS agreement on behalf of the Bush and Obama administrations. “Now that the KORUS amendments are in effect, the path is clear for Seoul and Washington to move to other issues. We hope that these recommendations will help keep the momentum going.”
The paper recommends that the U.S. government exempt Korea from existing and future action under Section 232, a trade enforcement provision which allows the U.S. president to restrict imports on national security grounds. It also urges Korea to join the United States in addressing China’s unfair trade practices.
The authors urge the two countries to move beyond issues that have dominated the bilateral trade relationship, such as auto market access, and cooperate on the development of standards for autonomous vehicles and other emerging technologies. Energy is highlighted as a significant opportunity for collaboration between the United States and South Korea. It recommends that the two countries work together to increase U.S. exports of liquefied natural gas (LNG) by expanding their import and export capacities, addressing transportation issues, and increasing investment, including the financing of a West Coast LNG export terminal.
The paper also highlights the shared interest of both countries in promoting sustainable models for funding infrastructure in the Indo-Pacific region – including possible projects in North Korea if they ever become feasible – and urges Seoul and Washington to follow through on plans to launch an initiative around women’s economic empowerment.
According to the authors, greater economic cooperation in these areas can advance the priorities of the Trump and Moon administrations. For Seoul, greater cooperation can boost economic growth during a slowdown and advance priorities such as transitioning to innovation-driven and service industries. For Washington, it can help attract investment, expand exports to South Korea, and allow the United States to work with a like-minded country on regional issues.
About the Asia Society Policy Institute
With a solution-oriented mandate, the Asia Society Policy Institute tackles major policy challenges confronting the Asia-Pacific in security, prosperity, sustainability, and the development of common norms and values for the region. The Asia Society Policy Institute is a think-and-do tank designed to bring forth policy ideas that incorporate the best thinking from top experts in Asia and to work with policymakers to integrate these ideas and put them into practice.