One reason top White House advisers are trying to stop Trump from withdrawing from the South Korea free trade agreement is because they do not want to isolate the government in Seoul at a time when North Korea has become increasingly adversarial with their missile program, testing nuclear weapons and firing missiles over Japan in a way that has alarmed the global community.
Chamber officials, in their memo to members, said they "and others in the USA business and agriculture community have received multiple reports that the administration is prepared to send a letter to the South Korean government on Tuesday, September 5 - or possibly sooner - indicating its intent to withdraw from the bilateral trade agreement". Trump has called the deal, which went into effect in 2012, a bad deal.
A South Korean trade ministry official said the government has been "thoroughly preparing for all possibilities" and would negotiate with Washington with an open attitude.
Tension heightened between Seoul and Washington over the weekend, upon reports by the US media that said President Donald Trump is considering a possible withdrawal from the Korea-US Free Trade Agreement.
The Washington Post report came as a surprise, especially considering that the bilateral trade agreement was not mentioned during a 40-minute phone conversation between Korean President Moon Jae-in and Trump made the day before. The agreement is "very much on my mind", Trump told a reporter from Reuters as he surveyed storm damage in Houston.
National Security Adviser H.R. McMaster, Defense Secretary Jim Mattis, and National Economic Council Director Gary Cohn are among the advisers to Trump who are against withdrawing the US from KORUS, the Washington Post reported.
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Two months before that meeting, Trump had threatened to withdraw from KORUS, triggering concern throughout the business community.
South Korea, home to Samsung, Hyundai and Kia among other companies with household names, is a major exporter of electronics and automobiles to the United States. "President Trump is committed to substantial improvements in the Korean agreement that address the trade imbalance and ensure that the deal is fully implemented".
If Trump withdraws from the agreement, he could try to force South Korea to import more USA products with little to no import restrictions, something he believes will help US companies and workers. Since his inauguration, President Trump has been expressing discontent over the five-year-old FTA, calling it a "horrible" deal that has resulted in a large trade deficit for America.
The U.S. Manufacturers Association also advised quick action among government officials, lawmakers and governors to prevent the breakdown in the deal.
"Unfortunately, too many American workers have not benefited from the agreement", Mr. Lighthizer said.
He added that particularly because of Mexico he might have to end up terminating the deal.