S. Korea opens auto market wider in return for steel quota

By Lim Chang-won Posted : March 26, 2018, 15:15 Updated : March 26, 2018, 15:15

[Yonhap News Photo]



SEOUL -- South Korea has agreed to open its auto market wider to American cars in return for a steel quota to avoid tariffs in negotiations on a new free trade agreement pushed by U.S. President Donal Trump, trade officials said Monday.

The trade ministry said South Korea steel products shipped under an annual import quota would not be slapped with a 25 percent tariff. As a result, South Korean steel shipment to the United States this year will stand at 74 percent of last year's exports estimated at 3.6 million tons.

South Korea will ease regulations to allow imports of 50,000 cars annually for each American company. The United States will maintain 25 percent tariffs on South Korean pickup trucks by 2041, while Seoul will apply eased emission standards for five years from 2021.

Trade officials said the tentative agreement would have a limited short-term impact on South Korea's car industry because US cars account for 6.8 percent of total foreign car sales in South Korea, which has yet to export pickup trucks to the U.S. market.

South Korea shipped 3.6 million tons of steel products to the U.S. last year, making it the No. 3 steel exporter after Canada and Brazil, according to the U.S. Department of Commerce.

Trade minister Kim Hyun-chong said Washington has demanded "one-sided" concessions in various fields, urging Seoul to ease import barriers on American cars because 74 percent of South Korea's trade surplus stems from cars and related parts. American carmakers regard South Korea's strict environmental regulations as non-tariff barriers.

Kim said the agreement would create a "stable" business environment for South Korean exporters at a time when uncertainties are growing due to a trade war between China and the United States. Seoul and Washington agreed to improve transparency in settling trade disputes. However, South Korea was reluctant to open its agriculture market wider, a sensitive issue that had triggered violent protests from farmers. 

There was no apparent progress in negotiations to remove safeguard duties on South Korean washers and solar panels and Kim vowed to use international bodies to protect South Korea's interests against unreasonable U.S. demands.
 
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