The news involving the Korean peninsula these days is dominated by the growing threat emanating from North Korea. The threat is not just to the United States, but also to our great ally, South Korea. Since its founding, South Korea has dealt with a belligerent neighbor everyday of its existence. In the face of this, the Korean people rebuilt a war-torn land and turned it into an economic powerhouse and bastion of freedom and democracy. There is, perhaps, no more profound comparison between neighbors than that of North/South Korea.
The United States has ongoing free trade agreements with South Korea, which has helped both nations. The value of free trade is indisputable and must continue for the sake of the US and South Korean economies, and for the benefit of our people. However, while the South Korean government has always been a strong and valuable ally, there are growing concerns that bad actors from South Korea are taking advantage of these agreements.
For example, South Korean mega-companies such as LG and Samsung have been extremely successful in penetrating the US marketplace. While their success in personal electronic devises is well-known, their ability to sell appliances such as washers and dryers is less known. This, in and of itself, is not problematic. However, these companies, and others like them, are heavily subsidized by the South Korean government. Thus, they are at a tremendous advantage over US companies, such as Whirlpool and General Electric (GE), that are trying to penetrate the South Korean market. In order to mitigate this concern, LG and Samsung previously made commitments to increase its manufacturing presence in multiple US cities.
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However, there is concern that these companies will not follow through on their respective commitments. Adding fuel to these concerns is the fact that they both recently increased their manufacturing presence in Thailand and Vietnam, sites that are earmarked for products set to enter the US market. Moreover, the current United States trade deficit with South Korea is significant, and currently stands at almost $20 billion.
South Korea, as all nations do, views trade as a benefit to its national interest. They subsidize their national brands and, at times, fail to regulate their company’s actions internationally.
It is time for the United States to simply insist our South Korean friends play by the same rules we are, so that we can truly have a free and fair-trade relationship that benefits both our great nations. President Trump and the Office of the United States Trade Representative (USTR) should work together to find reasonable fixes to our trade imbalance and ensure US companies can compete at the same level as our foreign partners so that our homeland enjoys the benefits of foreign investment into our manufacturing centers.