Despite weeks of frantic diplomacy, the chances of South Korea and the United States sealing a trade deal before next week’s Apec summit appear to be slim, with strong domestic backing enabling Seoul to resist a compromise seen as perilous to the national economy.
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Under a framework agreement reached in July, US President Donald Trump’s administration offered to cut tariffs on South Korean imports from 25 per cent to 15 per cent – but only if Seoul committed US$350 billion in investments into sectors earmarked by Washington.
South Korea fears that injecting such a massive amount of capital at once could trigger financial instability, given the size of its economy and foreign exchange reserves.
Follow-up negotiations have stalled over key issues, including how the investment package should be structured and profit-sharing between the two countries.
Seoul’s presidential chief of staff for policy, Kim Yong-beom, told journalists on Friday that some progress had been made but the two countries still “remain at odds on key issues”.
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“Differences have narrowed in many areas. But both sides still remain at odds over one or two of the most important matters,” he said, adding this was a “typical feature of negotiations”.