US–South Korea Kick Off Revision of Trade Agreement

US President Trump and South Korea's President Moon Jae-in hold a joint press conference in Seoul in November 2017. (Reuters)
US President Trump and South Korea's President Moon Jae-in hold a joint press conference in Seoul in November 2017. (Reuters)
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US–South Korea Kick Off Revision of Trade Agreement

US President Trump and South Korea's President Moon Jae-in hold a joint press conference in Seoul in November 2017. (Reuters)
US President Trump and South Korea's President Moon Jae-in hold a joint press conference in Seoul in November 2017. (Reuters)

The United States and South Korea on Friday completed the first round of review talks on a bilateral trade deal with Washington, saying there was "much work to do" to reach a new pact, reported South Korea’s news agency Yonhap.

Each side raised issues pertaining to the revision and implementation of the Korea-US free trade agreement, South Korea's trade ministry said in a statement.

The first round started at 10:00 a.m. on Friday at the US Trade Representative office in Washington. The South Korean delegate was headed by Myung-hee Yoo, Korea’s director general from the Ministry of Trade, Industry and Energy, while the US side was led by Michael Beeman, assistant US Trade Representative.

The South Korean Ministry of Trade, Industry and Energy said the talks focused on the areas of joint interests and sensitive sectors. The United States had primarily raised the issue of the automobile sector, Yoo told reporters after the end of the first round.

Following the talks with Korean trade officials in Washington, Robert Lighthizer, US trade representative said: “We have much work to do to reach an agreement that serves the economic interests of the American people.”

“Both sides agreed to follow-up to discuss the timing for the next meeting in the very near term.”

According to what was previously announced, the negotiations will continue every three to four weeks, and will take place between Seoul and Washington, but it is unclear whether an agreement will be reached.

Seoul has expressed interest in the field of dispute settlement between investors and the state, and in the field of trade remedies. It also explained its position on sensitive sectors, including trade in agricultural products and fisheries.

The head of the Korean delegation spoke to reporters as soon as he arrived in Washington on Thursday, pledging to give priority to national interests and seek balance of interests with the United States.

Since taking office in 2017, President Donald Trump has pulled the United States out of talks on a 14-nation Asia-Pacific trade pact, started negotiations on a new deal for the North American Free Trade Agreement between the US, Mexico and Canada and initiated a review of the 2012 Korea deal.

Washington has taken a hard line in the NAFTA talks, which appear stalled with just two rounds of negotiations left, saying that concessions are the only way for Canada and Mexico to keep the deal.

South Korea's economy is in good shape despite the tensions with its northern neighbor. Data from South Korea's central bank showed on Thursday that the country's foreign exchange reserve hit its highest level at the end of 2017 in line with the drop of the US dollar.

South Korea's foreign exchange reserves at the end of December reached a total of $389.27 billion, an increase of $2.02 billion over the last month, the central bank said in a statement. The foreign exchange reserve hit a high record of $387.25 billion at the end of November, breaking its record of one month ago, according to Yonhap.

The recent decline in the US dollar has boosted the values of other currencies when converted into the US dollar, the central bank said. Foreign exchange reserves consist of securities and deposits in foreign currencies, as well as reserve deposits in the IMF, Special Drawing Right (SDR) and gold bullions.

South Korea was ranked ninth in the world in terms of foreign exchange reserves at the end of November, after China, Japan, Switzerland, Saudi Arabia, Taiwan, Russia, Hong Kong and India, the central bank said.

On the other hand, the value of foreign direct investment (FDI) commitments in South Korea last year reached a record high of over $20 billion, and exceeded the set target. The Ministry of Commerce, Industry and Energy said Wednesday that the value of foreign direct investment commitments in 2017 reached $22.94 billion, an increase of $7.7 billion over the previous year, which is the highest value ever, and exceeds $20 billion for the third year in a row.

Yonhap said real investment by foreign companies and investors had increased by 20.9% a year to $12.82 billion in 2017.

FDI commitments in the first three quarters of last year fell by 9.7% from the same period last year to $13.59 billion, but posted a quarterly record of $9.36 billion in the fourth quarter.

The ministry said in a statement that the country has been assessed as a stable investment destination despite the North Korean nuclear crisis, adding that the main reasons for increasing foreign direct investment are the country's top credit rating, expansion of investment in manufacturing industries related to the Fourth Industrial Revolution and modernization of the industrial structure.



S&P Upgrades Italy in Surprise Boost for PM Meloni

 Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)
Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)
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S&P Upgrades Italy in Surprise Boost for PM Meloni

 Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)
Italian Prime Minister Giorgia Meloni waits for the arrival of Queen Rania of Jordan at Villa Doria Pamphili in Rome, Italy, 09 April 2025. (EPA)

Credit ratings agency S&P Global upgraded Italy on Friday in a surprise move just days after Rome halved its economic growth forecast amid global market turmoil and said its huge public debt would rise this year and next.

S&P Global raised Italy's sovereign debt rating to BBB+ from BBB, citing its falling budget deficit, resilient exports and high domestic savings rate, and confidence that the European Central Bank will keep any inflationary pressures in check.

It said the new rating carried a stable outlook.

"The upgrade reflects Italy's improved economic, external, and monetary buffers amid rising global headwinds, and the gradual progress it has made in stabilizing public finances since the (COVID-19) pandemic's onset," S&P Global said.

Earlier this month Fitch affirmed its BBB rating with a positive outlook, while Moody's rates Italy Baa3 with a stable outlook.

S&P's upgrade is a boost for Italian Prime Minister Giorgia Meloni ahead of a meeting with US President Donald Trump in Washington on Thursday expected to focus on US trade tariffs which have hit financial markets worldwide and clouded economic prospects.

S&P Global noted that Italy's net external creditor position had strengthened over the last five years to around 15% of gross domestic product, compared with close to balance just before the pandemic.

"S&P's judgment rewards the seriousness of the Italian government's approach to budget policy," said Economy Minister Giancarlo Giorgetti. "In the general uncertain climate, prudence and responsibility will continue to be our course of action."

The agency had made no change to Italy's rating or outlook since July 2022, when it revised the outlook to stable from positive following the collapse of the government of former Prime Minister Mario Draghi.

STAGNANT ECONOMY

On Wednesday, Italy committed to keeping its budget deficit in check even as it slashed its economic growth forecasts against a backdrop of mounting uncertainty connected to the US trade tariffs.

Yet even before Trump's tariff announcements, the euro zone's third largest economy has posted virtually no growth since mid-2024.

Italian GDP edged up by 0.1% in the fourth quarter of last year from the previous three months after stagnating in the third quarter. No pick-up is expected in the near term.

In its multi-year economic framework issued on Wednesday, the government cut its forecast for 2025 GDP growth to 0.6% from a projection of 1.2% made in September, and lowered its 2026 forecast to 0.8% from 1.1%.

The Treasury confirmed its previous 2025 budget deficit estimate at 3.3% of national output and also confirmed its goal of bringing the fiscal gap below the European Union's 3% of GDP ceiling in 2026, maintaining a 2.8% target.

However, it said the public debt - the second highest in the euro zone after Greece's - would climb from 135.3% of GDP last year to 137.6% by 2026, before edging down marginally the following year.

S&P also forecast Italy's GDP growth at 0.6% this year, in line with Meloni's government, and said the country's rising debt would not stabilize until 2028.

Nonetheless, it said Trump's latest decision to suspend previously announced 20% tariffs on European Union goods for three months, and to impose a milder 10%, meant the hit to Italy's economy would be "manageable".