By Kim Jae-kyoung
South Korea should strengthen its diplomacy to local actors outside Washington to cut a win-win deal from Korea-U.S. Free Trade Agreement (KORUS FTA) renegotiations and steel tariff talks, U.S. trade experts said Sunday.
They said direct negotiations with Washington are important but recommended more efforts to help local stakeholders better understand the potential impact of protectionist measures to get Trump to take a fresh look at bilateral trade issues.
They suggested Korea take a cue from Canada and Mexico, both of which were exempted from the Trump administration's hefty tariffs on steel and aluminum. The duties imposition will come into force this Friday.
"It's important to remember that emphasis should not only be placed on Washington," Troy Stangarone, senior director at the Korea Economic Institute (KEI) based in Washington, told The Korea Times.
Stangarone, who is in charge of congressional and trade affairs, pointed out Canada and Mexico have been reaching out to governors and local officials around the U.S. because they have significant stakes in the overall relationship.
"If a member of Congress' or governor's constituents think the KORUS FTA or the U.S.-Korea alliance is important, they will too," he said.
When Trump originally considered terminating the North American Free Trade Agreement (NAFTA), the secretary of agriculture showed him a map of the areas likely to be negatively impacted by a withdrawal from NAFTA and the districts he had won in the campaign.
This is why Canada and Mexico have engaged in extensive public diplomacy to ensure the mutually beneficial relationship between the U.S. and its NAFTA partners is understood.
"While there has been talk of Canadian Prime Minister Justin Trudeau convincing him to renegotiate instead, it was likely this understanding that Trump would have been hurting his own voters if he withdrew from NAFTA that persuaded him to renegotiate instead," he said.
When it comes to the KORUS FTA, similar to NAFTA, there is a broader relationship that is of interest to governors, mayors and businesses.
"In the U.S., local politics matters in a way that it doesn't in other countries, so public diplomacy and explaining the importance of the U.S.-Korea relationship to local actors is an important part of ensuring stability in the relationship," he said.
Mauro Guillen, director of the Lauder Institute at the University of Pennsylvania's Wharton School, echoed the view, saying the only possible response is to inform the U.S. of the consequences of protectionism.
"South Korean officials should continue to talk to their U.S. counterparts and explain why protectionism is not a good option for the long run. I see no other way of dealing with this problem," he said.
The advice came after Seoul and Washington have failed to iron out differences over key issues, including exempting Korea from the U.S. steel tariff list, in their third round of KORUS FTA renegotiations that ended Friday in Washington, D.C.
Trump is increasing pressure on Moon to get a better trade deal by threatening to remove U.S. troops from South Korea unless ongoing trade talks pan out smoothly. The fourth round of FTA renegotiations is due soon.
Antonio Fatas, a Singapore-based economics professor at global business school INSEAD, said for successful negotiation, it is important to understand what the Trump administration really wants.
"Trump's views are inconsistent and changing. It seems the best strategy for Korea is to understand the thinking process of the Trump administration and use it to obtain concessions in some of these decisions," he said.
He suggested Korea use North Korea's nuclear program as leverage.
"What does South Korea have that Trump might want? Help with North Korea. It is unclear what South Korea can offer but this is the one button it can try to push," he said.
In addition to diplomatic efforts, experts said the Moon administration should also seek ways to reduce trade deficits with the U.S. to get the upper hand in FTA talks.
"Korea needs to reduce trade surpluses against the U.S.," said Sohn Sung-won, an economics professor at California State University-Channel Islands.
"The best way is to increase trade in both directions. This means Korea would have to import more from the U.S."