이현근 명수환 임채환 송우진 2018-11-15T13:09:56Z 2018-11-15T13:09:56Z 2017-10-17 PRI042e http://repository.krei.re.kr/handle/2018.oak/22264  U.S. President Donald Trump expressed his willingness to revise and amend the Korea-U.S. FTA, with his negative perspective on the trade imbalance between the two countries. Korea and the U.S. recently agreed to renegotiate the trade pact. – At the request of U.S. President Trump, the first and second special joint committee meetings were conducted on the KORUS FTA. After the second meeting, the two countries decided to commence the amendment negotiation procedure.  In terms of BOP, Korea has recorded current account surplus with the U.S., but it has invested more in the U.S. than the counterpart did in Korea. And TSI varies depending on the global competitiveness of a country. – Korea’s average investment (financial account) in the U.S. improved from USD 3.1 billion of liabilities to assets worth USD 18.1 billion after the implementation of the FTA. The country’s average current account surplus went up by 106.7% from USD 16.2 billion to USD 33.5 billion after the implementation of the FTA. – Korea’s TSI dropped in all industries where the country has higher competitiveness than the U.S. and the rest of the world. The U.S. TSI against the RoW worsened, while its TSI in trade with Korea improved.  The merchandise trade in the agri-food sector has an unbalanced trade structure in which Korea’s imports are much larger than its exports to other countries. A deficit in the goods account of livestock products (including dairy products), fruits and nuts worsened after the FTA took effect. – The TSI of more competitive product groups of Korea compared to the U.S. decreased from 0.68 in 2011 to 0.61 in 2016, which was lower than that of the U.S. (0.97). The TSI of less competitive product groups slightly increased from –0.96 to –0.94 during the same period, but it was still much lower than the U.S. (-0.66). – The goods deficits increased in the categories of beef (USD 150 million in carcass, USD 200 million in boneless meat), fresh cheese (USD 10 million), skim milk powder (USD 8 million), orange (USD 50 million), grape (USD 9 million), and grapefruit (USD 6 million).  Trade imbalance between Korea and the U.S implies that a balanced, adequate view on it can be made when a macroscopic BOP including the current (goods) account is considered. The merchandise trade imbalance between the two countries should be addressed without going against the purpose of the free trade agreement. – Korea’s import-specialized structure in the agri-food sector can become permanent if the tariffs for agricultural products imported from the U.S. are immediately abolished, and this could affect the free trade agreements Korea concluded with other countries. Therefore, the resolution of goods deficit should be aimed at enhancing the domestic and global competitiveness, rather than readjusting the tariffs and the tariff elimination timing.  Korea needs to exert efforts to improve the structure of the agri-food sector that largely relies on imports, and set the direction of policies by considering the domestic agricultural industry structure and market conditions. – The authorities should enhance the global competitiveness to improve the current import-specialized structure of the agri-food sector in trade with the U.S., and transform the framework of the industry and relevant policies with consideration for changing consumer demands and market conditions. To this end, a cooperative system at the level of governance is required. 한국농촌경제연구원 Fact-checking of Unbalanced Korea-U.S. Trade and Countermeasures in the Agricultural Sector Fact-checking of Unbalanced Korea-U.S. Trade and Countermeasures in the Agricultural Sector KREI 이슈리포트 Lee, Hyunkeun Myeong, Suhwan Lim, Chehwan Song, Woojin