Trump Mulls Scrapping Korea Trade Deal - Global Trade Magazine
  September 5th, 2017 | Written by

Trump Mulls Scrapping Korea Trade Deal

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  • Trump's foreign policy and economic advisers are against the scrapping of the Korea trade pact.
  • Trump tweet: “South Korea is finding...that their talk of appeasement with North Korea will not work.”
  • US has to walk a fine line on North Korea policy.

President Donald Trump is reportedly considering canceling the US-Korea Free Trade Agreement. This, as North Korea has apparently detonated a sixth nuclear weapon, and the United States is attempting to galvanize the world to impose stricter sanctions against the rogue North Korean regime at the United Nations.

Reporting in the Washington Post indicates that Trump’s foreign policy and economic advisers are against the scrapping of the trade pact, which was signed in 2007 and went into force in 2012. Trump says South Korean exports to the US have grown since them while US exports in the opposite direction have not.

The scenario illustrates the growing relationship between trade policy and foreign policy, a connection that appears to be lost on the president.

Or is it? Trump saw fit to tweet a couple of days ago against what he sees as the appeasement of the northern regime by the south.

The newly-elected government of South Korea has been trying to pursue a policy of rapprochement with the north through negotiations, although to no avail. Could Trump’s threat to end the trade deal be a tactical move to get South Korea in tow with Trump’s hard line against the North?

Probably not. This president has proven himself notorious in making impulsive statements in reaction to the circumstances of the moment. And he has a separate agenda of ending or renegotiating trade pacts that he deems to be unfair.

Even if Trump’s invective against South Korea was thought out, this is not the time for the United States to be seen threatening its allies, especially one which is itself threatened by its very dangerous neighbor. The US-South Korea relationship goes back nearly 70 years.

Trump has also threatened to end trade with any country that does business with North Korea. That includes US friends like Mexico, Brazil, and Germany. It also includes China, the biggest trade partner of the United States. Ending trade with China is a no-go.

Trump is probably right that getting China to take a harder line against North Korea would help keep its leader Kim Jong-un under control. China’s concerns are two-fold: that a collapse of the North Korean regime would leave a united Korean peninsula in its backyard under western dominance and that strangling the North Korean economy would drive Kim to act even more erratically.

That’s why it’s a fine line that has to be walked when it comes to US policy on North Korea. And that’s why threatening US allies over trade at a time like this—whether it was an impulsive statement or part of larger plan—doesn’t make any sense.