Seoul March 26 – Both the USA and South Korea reached an agreement on Monday to revise the trade policies of the two countries. Asian market became stable on Monday after the turbulent atmosphere prevailed for quite a long period of time after US president’s decision of imposing tariffs on the export of Chinese goods was about to trigger a trade war between the two countries. The agreement, however, forced South Korea to face quota system and cut its exports to the US by 30 percent of the past years average.This will enable South Korea to become the first trade partner of the USA to receive an unlimited exemption on steel tariffs.
The US president decided on last Friday to exempt six partners of the USA namely Canada. Mexico and the European Union from higher import duties on steel and aluminium. In the meeting it was decided that South Korea would receive a quota of 2.68 million tons of steel export or 70 percent of the annual average of Korean steel exports to the USA. Between 2015-17. South Korea did not get the opportunity to export beyond that limit according to a spoke person of South Korean Trade Ministry. The spokesperson also added that the US president came into after promising to stop unfair trade practice of other countries and hence it was obvious that he would give much emphasis on this issue.The US-Korea Free Trade Agreement (KORUS) the US automakers would be able to export about 50000 vehicles according to US safety standards South Korea has agreed to give concessions to the US automakers on condition of receiving an exemption on export of steel . The South Korean Law and Trade Minister made it clear it is a ,managed trade policy not a free trade policy. Monday’ agreement give some relief to South Korea ,the third largest exporter of steel in the USA and the highest importer of Chinese steel in the world.