European manufacturers are no longer required to manufacture cars specifically for the South Korean market or to carry out expensive tests to demonstrate compliance with safety standards. The renegotiation of KORUS is a useful example of Trump`s trade agreements in practice. As we will see below, the renegotiations have made only minor changes to the agreement and could be adopted in such a way that the reality of Trump`s trade policy does not always correspond to rhetoric. However, the government`s concerns about trade with Korea have always been less acute than their concerns about trade with other trading partners, so the conclusion of the korus talks, with minor changes, can only reflect the government`s focus on other areas of trade policy and not on its overall approach to trade policy. The Republic of Korea is a member of the World Trade Organization (WTO) and has signed subsidiary agreements, including trade Related Aspects of Intellectual Property and the Government Procurement Agreement. Korea has been a member of the Organisation for Economic Co-operation and Development (OECD) since December 1996. 9 Steve Holland, “Trump Hints on Withdrawal from U.S.-South Korea Free Trade Deal,” Reuters, September 2, 2017. At this time, North Korea announced a successful test of a nuclear weapon that could be loaded onto a long-range missile, which could have influenced the views of the United States and South Korea on trade issues. “North Korea Nuclear Test: Hydrogen Bomb `Missile`Ready,” British Broadcasting Corporation (BBC) News, 3 September 2017. 24 Hyunjoo Jin and Joyce Lee, “U.S., South Korea Revise Trade Deal with Quotas on Korean Steel,” Reuters, March 26, 2018. According to the original KORUS, U.S. automakers can export up to 25,000 vehicles (per manufacturer per year) to Korea, considered to meet Korean safety standards, provided they meet U.S. standards.
As part of the renegotiation, the annual quota was increased to 50,000 vehicles per manufacturer.22 At first glance, it appears to be a good market opening and a positive development for improved U.S. access to the Korean market. However, the real economic value is not clear. In 2017, U.S. exports of cars and light trucks to Korea accounted for only 52,687 units; To put this figure into perspective, Canada is the first target for U.S. car exports, with 917,669 units, and China is in second place with 262,527 units.23 In addition, Ford and General Motors each have less than 10,000 vehicles to Korea in 2017.24 Given the low volume of car exports to the United States to Korea, the quota increase is unlikely to have much influence. Although most of the KORUS 2.0 amendments were directed towards US requirements, three minor amendments were made at Korea`s request. First, the investor-state dispute settlement mechanism has been slightly revised and is broadly similar to the rules of the Comprehensive and Progressive Trans-Pacific Partnership Agreement.