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EU trade commissioner: It is wrong to blame KORUS FTA for US trade deficits

EU trade commissioner: It is wrong to blame KORUS FTA for US trade deficits

Posted September. 20, 2017 07:56,   

Updated September. 20, 2017 08:34


The European Commissioner for Trade said it is wrong to blame the Korea-U.S. free trade agreement for U.S. trade deficits with regard to the Trump administration’s demand for the revision of the trade agreement. In other words, U.S. trade deficits are not caused by the unfair trade agreement, but rather the deficits are the result of consumers’ choices.

Cecilia Malmström, a European Commissioner for Trade, had an email interview with the Dong-A Ilbo ahead of her visit to Korea on Thursday. “U.S. companies should ask themselves why they exported fewer cars to Korea.” “We should not forget that trade balance shows only a very small part of the big picture,” she said. “The trade of Korean companies, which are integrated into the global value chain by investing heavily in other countries including the U.S., the E.U., Southeast Asia and China, are not captured in statistics.”

It means that the trade deal is not a loss to the U.S. just because of a trade deficit, when considered transactions that are not covered in Korea-U.S. trade balance figures.

Malmström said that the trade balance does not show the whole picture of trade results of both countries. “(Unlike the Trump administration) the EU does not see that a country with a trade deficit made a loss and a country with a trade surplus won,” she said. “We do not see trade in a plus-minus way but as a growth of the sum.” She accepted most of the claims made by South Korea over the controversy over the renegotiation of the KOR-US trade agreement, while pointing out the flaws in the claims made by the U.S.

Malmström whose position is equivalent to Korea’s trade minister is responsible for free trade deals with Korea and Japan and responding to the U.S. trade protectionism. She comes to Seoul to attend the ASEM Finance Ministers’ Meeting and a forum to discuss the achievement of the free trade agreement between Korea and the E.U.

Eun-A Cho achim@donga.com