• Concerns over US ‘Stronger Protectionist Trade Policy’ Despite COVID-19 Crisis
    2020-03-31 hit 1533

    Concerns over US ‘Stronger Protectionist Trade Policy’ Despite COVID-19 Crisis

    - KITA analyzed the impact of coronavirus outbreak on the US trade policies Korea needs to be prepared for stronger protectionist trade policies -

    South Korea needs to keep a close eye on the trade protectionism of the United States as the US president Trump is expected to push for my country first trade strategy and raise trade barriers ahead of the presidential election in November despite the worldwide spread of the novel coronavirus. 

    According to a report titled, "The COVID-19 Variable and Direction of US Trade Policy" issued by the Korea International Trade Association (Chairman: Kim Young-Ju) on April 1st, the COVID-19 pandemic has emerged as an important variable in the Trump administration's America First trade policy and the dynamics of the US presidential election.

    The report stated "The US trade negotiations scheduled this year are likely to be postponed one after another, and internal and external criticism on the country’s strong protectionism is expected to grow," and added, It is forecast that President Trump will make all-out efforts to maintain the existing trade protectionism by highlighting security threats from China in association with COVID-19 and raising trade barriers.

    According to the report, President Trump emphasized the achievements of trade policies such as the US-China Phase 1 Trade Agreement and the signing of the US-Mexico-Canada Agreement (USMCA) when announced the trade policy agenda at the beginning of the year. He said that he would fully focus on the US-China Phase 2 trade, the effectuation and implementation of the USMCA, bilateral trade agreements with the European Union (EU), the United Kingdom, and Kenya, and the reform of the World Trade Organization (WTO). The United States is expected to enforce the USMCA as scheduled on June 1st, and the U.S. Trade Representative (USTR) is expressing its willingness to carry out the trade negotiations with the EU without any delay. 

    Despite the recent pandemic of COVID-19, if the United States concludes all new and revised trade negotiations that the country is working on, the United States will end up signing the agreements with 66.6 percent of the country’s export destinations. With regard to this, the report said, “It is not only the economic objective of resolving the trade deficit and improving access to overseas markets, but also the political calculations to keep China in check, and analyzed, It can also be interpreted as a means to embrace influential member states such as India and Brazil as well as allies for the reform of WTO.

    The report also forecast, “Even through the WTO reform is not made soon, it will have an effect of spreading the US trade order through the agreements with major trading partners.”

    Seol Song-yi, a researcher at KITA’s Center for Trade Studies & Cooperation, said, Korea should pay attention to how President Trump will use the COVID-19 crisis for his trade policy, which is considered as his best deed, and stressed, Korean companies need to keep a close eye on the impact of the COVID-19 outbreak and political variables in the US presidential election that can affect the country’s trade policies and proactively respond to the changes.”  

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