President Donald Trump said Saturday he is weighing whether to start the process of withdrawing from a free trade agreement with South Korea, with the U.S. Chamber of Commerce urging its members to respond with "all hands on deck" and stop a decision that could come as early as next week.
However, administration officials noted that the United States and South Korea have been in talks on revamping the pact, also known as KORUS.
Scrapping the deal would also have profound geopolitical implications in the region, said Mr Michael Green, an Asia expert at the Centre for Strategic and International Studies who oversaw issues on the Korean Peninsula during the administration of former president George W Bush.
Trump made his remarks to reporters while visiting hurricane-hit Houston a day after he spoke with South Korean President Moon Jae-in and struck a deal allowing Seoul access to longer-range missiles and a potential arms sale to Seoul.
Trade Minister Kim Hyun-chong on August 22, after holding a special session with the United States Trade Representative Robert Lighthizer, said both sides have failed to reach an agreement and that the Korean team did not agree to the US proposals.
It remains to be seen if North Korea's latest nuclear test yesterday would change the President's calculus, given the importance of Seoul as Washington's partner in dealing with Pyongyang.
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Mr Trump has blamed the accord on his 2016 Democratic presidential election opponent, Hillary Clinton, who as Mr Obama's Secretary of State promoted the final version of the agreement before its approval by the US Congress in 2011. "USTR has long pressed the Korean government to address burdensome regulations which often exclude US firms or artificially set prices for American intellectual property".
"Discussions are ongoing, but we have no announcements at this time", a White House spokeswoman said in an email.
The President's top economic advisers are deeply divided over a possible withdrawal from the US-Korea Free Trade Agreement, as negotiators from both countries struggle to rewrite the five-year-old deal.
South Korea is "thoroughly preparing for all possibilities and will closely monitor" the U.S. developments over the trade agreement, the ministry official said, according to Yonhap. A White House official noted that US Trade Representative Robert Lighthizer met with Korean officials in July to begin negotiations.
Mr Trump's push to revise the deal is part of his broader drive to tackle unfair trading practices and cut the U.S. trade deficit.
The United States, Canada and Mexico formally launched talks last month on renegotiating NAFTA, and are holding a second round this week in Mexico City. If true, the move would deal a big blow to the relations between the allies, stoking economic tension at a time of escalated threats from North Korea. While $500-Million in Alabama goods go to South Korea each year, nearly $2-Billion in South Korea good are shopped here, much of it involving the Hyundai plant in Montgomery.