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🇰🇷 South Korea /Economy & Trade

Seoul Defends Trade Surplus in US Probe, Cites Job Creation

From Hankyoreh · (4m ago) Korean

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • South Korea defended its trade surplus with the US at a public hearing for the US Trade Representative's Section 301 investigation.
  • Seoul argued that its trade surplus contributes to job creation in the US and that its industries operate on market economy principles, not state-led overproduction.
  • The government aims to minimize damage from the investigation, which could lead to new US tariffs and trade sanctions.

South Korea is actively defending its trade practices against the United States' Section 301 investigation, asserting that its substantial trade surplus with Washington is not a sign of unfair competition but rather a contributor to American jobs. At a hearing before the International Trade Commission (ITC) in Washington D.C., Korean officials emphasized that their industries, particularly in high-value sectors like semiconductors, automobiles, and batteries, are deeply integrated with US supply chains and production facilities.

The proportion of high-tech, high-value-added items such as semiconductors, automobiles, and batteries is high, and it is closely linked with the US supply chain and production facilities. It is also contributing to job creation in the US.

— Korean Government OfficialExplaining South Korea's trade surplus with the US during the Section 301 investigation hearing.

The Korean government's stance is that its industrial structure is fundamentally based on market economy principles. This counters the US administration's concerns about state-led overproduction. Seoul highlighted ongoing voluntary restructuring within its industries, supported by government initiatives, as evidence of its commitment to market dynamics rather than unfair trade practices. This defense is crucial as the investigation's findings could form the basis for new US tariffs and trade sanctions.

Seoul's strategy involves actively engaging in public hearings and submitting opinions to the USTR to mitigate potential negative impacts. The government is keen to protect its domestic industries, which are currently undergoing restructuring to cope with chronic downturns attributed to oversupply, particularly from China. The argument is that these restructuring efforts, coupled with the inherent value and integration of Korean exports into the US economy, demonstrate a mutually beneficial trade relationship.

The Korean industrial structure is based on market economy principles and is clearly different from the state-led overproduction that the USTR is concerned about.

— Korean Government OfficialAsserting that South Korea's economy operates on market principles during the Section 301 investigation hearing.

Furthermore, Korea is leveraging existing agreements, such as the 'Korea-US Strategic Investment Memorandum of Understanding (MOU),' to underscore the strength and importance of the bilateral economic partnership. The goal is to ensure that the US recognizes the contributions of Korean investment and trade to the American economy, thereby seeking exclusion from potential punitive measures. This proactive engagement reflects Seoul's determination to safeguard its economic interests while navigating complex international trade relations.

Based on the 'Korea-US Strategic Investment Memorandum of Understanding' (MOU) signed between the two countries last year, cooperation between the two countries should be strengthened.

— Korean Government OfficialHighlighting the importance of the bilateral MOU to strengthen cooperation during the Section 301 investigation hearing.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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