Trump considers leaving major S Korea trade deal

WASHINGTON — United States President Donald Trump is considering pulling out of a major trade agreement with South Korea as he tries to fulfil get-tough campaign pledges on international trade, two senior administration officials said over the weekend.

It remains to be seen if North Korea’s latest nuclear test yesterday would change the President’s calculus, given the importance of Seoul as Washington’s partner in dealing with Pyongyang.

The President’s top economic advisers are deeply divided over a possible withdrawal from the US-Korea Free Trade Agreement, as negotiators from both countries struggle to rewrite the five-year-old deal.

In recent days, a frustrated Mr Trump has pushed his staff to take bold action against a host of governments, including the one in Seoul, that he has accused of unfair trade practices.

But many of his more moderate advisers, including the chairman of the National Economic Council, Mr Gary Cohn, believe such a move could prompt a trade war that could hurt the US economy.

An industry publication, Inside US Trade, first reported late on Friday that the administration was considering withdrawing from the treaty as early as next week.

“Discussions are ongoing, but we have no announcements at this time,” a White House spokeswoman said in an email.

But Mr Trump, asked on Saturday whether he was talking with his advisers about the trade deal, said: “I am. It’s very much on my mind.”

The idea of potentially withdrawing seems to have been prompted by the breakdown in negotiations between South Korean officials and the US trade representative, Mr Robert Lighthizer, a US official with knowledge of the situation said.

An initial meeting generated little consensus, with South Korean officials offering to consider minor adjustments to the agreement, but rejecting a wholesale renegotiation — angering hardliners in the White House who have targeted countries such as China, Japan, Mexico and South Korea that have large trade surpluses with the US.

But it remains unclear whether the administration would actually withdraw from the deal, and industry representatives who have lobbied the White House say the President’s team has done little of the work — like a wide consultation with affected industries — needed before taking such a step.

The possibility of abandoning the agreement has alarmed economists and some members of the President’s party who fear that such a move would force South Korea to block US manufacturers and farmers from a lucrative market.

Scrapping the deal would also have profound geopolitical implications in the region, said Mr Michael Green, an Asia expert at the Centre for Strategic and International Studies who oversaw issues on the Korean Peninsula during the administration of former president George W Bush.

“One of the big reasons we decided to go forward with the agreement was to demonstrate to the South Koreans, North Koreans and Chinese that the US was committed to this relationship for the long haul,” Mr Green said.

That the administration would even consider cancelling the agreement in the midst of the North Korean missile and nuclear crisis is astonishing, Mr Green said.

“It’s probably all theatre, but it has negative strategic consequences as we try to manage the North Korean threat,” he said. THE NEW YORK TIMES