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(News Focus) Foreign ministry to reclaim trade negotiation task amid looming FTA revision with U.S.

2017/05/25 18:57

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SEOUL, May 25 (Yonhap) -- The Moon Jae-in administration is seeking to put the foreign ministry back in charge of trade issues, a move aimed at beefing up bargaining capabilities to cope with rising protectionism and the looming prospect of revising its free trade agreement with the United States.

The State Affairs Planning Advisory Committee, the de facto transition team for Moon, unveiled on Wednesday a government reorganization plan under which the function of trade negotiation and conflict resolution will be relocated to the Ministry of Foreign Affairs from the Ministry of Trade, Industry and Energy.

The reshuffle would bring the trade bureau back under the wing of the foreign ministry more than four years after the former Park Geun-hye administration transferred the task to the industry ministry with the aim of mobilizing industrial expertise in trade negotiations in early 2013.

The decision mirrors Moon's judgment that trade issues need to be considered in the context of diplomacy, especially when trade is at the very fore of the country's relations with its two biggest partners.

The Donald Trump administration is moving to renegotiate the five-year-old FTA with South Korea. The U.S. president accused the trade deal, once touted highly by the allies, of stealing American jobs and incurring trade deficits.

In a media interview last month, Trump called the agreement "horrible," vowing to "renegotiate or terminate" the KORUS FTA. The Korean Economic Research Institute predicted that about $17 billion losses would be inflicted if the South Korea-U.S. FTA gets revised.

"It's crucial to form a system that could integrate diplomacy and commerce in dealing with the Trump administration's 'power-based' trade policy," Choe Won-gi, professor at the state-run Institute of Foreign Affairs and National Security said in his recent report.

"Our current commerce organization that separates trade and diplomacy has a lot of limitations in responding (to trade tasks) effectively," he noted.

South Korea also suffered unrelenting trade retaliations by China amid a diplomatic feud over the deployment of the U.S. missile defense system in the country, Terminal High Altitude Area Defense or THAAD.

In protest, China banned local travel agencies from selling tour packages to South Korea, resulting in a sharp reduction in Chinese travelers coming to the South.

Prolonged negotiations for an FTA with Japan as well as a trilateral FTA with Japan and China also require carefully choreographed diplomacy to promote an economic partnership that could overcome the historically loaded rivalry between the countries.

During his presidential campaign, Moon has pledged "to spearhead trade liberalization in the Asia-Pacific region by sealing the South Korea-China-Japan FTA." He also vowed to formulate a security regime among the three through the FTA signing.

Professor Choe suggested Seoul urgently needs to amplify its response capabilities dealing with trade issues by staffing its trade negotiation body in a way that could create synergy between diplomacy and trade policy.