10th Anniversary of the Korea-US FTA... Steel Industry Cannot Smile Over 'Steel Section 232'

Among US Import Restriction Measures, South Korea Ranks Third
"Stagnation in Response to Demands for Export Volume Expansion"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Although it has been 10 years since the Korea-US Free Trade Agreement (FTA) came into effect, the United States continues to maintain stringent import restrictions on certain items. A prime example is Section 232 of the US Trade Expansion Act, which limits South Korea's steel exports to the US.

According to the "10th Anniversary Evaluation and Challenges of the Korea-US FTA" report released by the Korea International Trade Association on the 13th, the US has imposed import restrictions worldwide, and South Korea is the third most targeted country for such regulations.

The Trump administration applied Section 232 of the Trade Expansion Act in 2018, allowing the US to restrict imports or impose high tariffs if foreign imports are deemed a threat to national security.

At that time, under the pretext of protecting the automobile and steel industries, the US imposed a 25% steel tariff on the European Union (EU) and Japan, while restricting South Korea's annual steel export volume to the US to 70% of the average from 2015 to 2017 for three years?a measure that remains in effect.

Notably, while the EU and Japan can continue exporting by paying a 25% tariff even if their export volumes exceed quotas, South Korea is prohibited from exporting beyond its quota. Additionally, the quota can be adjusted based on US steel demand, allowing for expansion if demand grows, but South Korea's quota adjustment is not permitted.

The report pointed out, "The US agreed to ease Section 232 steel measures imposed on the EU and Japan by the previous administration," adding, "For Korean steel, an agreement was made to limit quantities instead of imposing tariffs, but the US has not responded to South Korea's demands for quota expansion, resulting in a stalemate."

The government held an emergency meeting with the domestic steel industry on the 2nd to discuss countermeasures against the US 'Steel Section 232' and is actively negotiating with the US.

Despite meetings with political and business figures as well as industry representatives to request improvements, there are few signs of resolution, indicating that the stalemate may be prolonged. Domestic steel companies, unable to increase exports to the US, are concerned about losing competitiveness.

On the 3rd (local time), Yeo Han-gu, Director-General of Trade Negotiations at the Ministry of Trade, Industry and Energy, discussed the issue of improving 'Steel Section 232' during a meeting with the US Department of Commerce in Washington DC.

Director-General Yeo stated, "As allies working together on various matters, I strongly raised the point that the steel issue must be resolved."

However, he added, "The (US) response was understanding of Korea's position," but also noted, "There are various complex domestic situations within the US. We agreed to continue close consultations."

As a result, although discussions took place, no solution through renegotiation was reached. With the US midterm elections approaching in November and the Midwest region?where steel production is concentrated?being a battleground state, some point out that the possibility of further negotiations within the US is slim.

This content was produced with the assistance of AI translation services.