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.



Gold Hits Three-week Peak on Softer Dollar and Safe Haven Inflows

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)
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Gold Hits Three-week Peak on Softer Dollar and Safe Haven Inflows

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)

Gold prices touched their highest level in three weeks on Friday supported by a softer dollar and safe-haven buying, while markets braced for potential economic and interest rate changes from US President-elect Donald Trump's proposed policies.

Spot gold was little changed at $2,658.11 per ounce, as of 1115 GMT, hitting its highest level since Dec. 13. Bullion is up about 1.5% for the week so far.

US gold futures were steady at $2,672.20.

The dollar index fell 0.3% from over a two-year high hit in the previous session, making dollar-priced bullion more affordable for holders of other currencies, Reuters reported.

"Gold bulls are setting the tone early doors this year, enjoying the lift from safe haven bids while riskier equities struggle to hold on to nascent gains," said Exinity Group Chief Market Analyst Han Tan.

On the geopolitical front, in Gaza Israeli airstrikes killed at least 68 Palestinians, Gaza authorities said. While, Russia launched a drone strike on the Ukrainian capital Kyiv on Wednesday, city officials said.

Trump's inauguration on Jan. 20 has heightened uncertainty, with his proposed tariffs and protectionist policies expected by many economists to be inflationary and potentially spark trade wars.

"Markets are aware that Trump's policies risk reawakening US inflationary impulses, which should be a boon for gold so long as markets adhere to the precious metal’s role as an inflation hedge," Tan added.

Bullion, which is considered a hedge against economic and geopolitical uncertainties, tends to thrive in lower interest rate environment.

After delivering three consecutive interest rate cuts in 2024, the US central bank now projects only two reductions in 2025 due to due to stubbornly high inflation.

Spot silver rose 0.6% to $29.75 per ounce.

"Lower real US yields and stronger global industrial production should favor the metal in 2025," UBS said in a note, adding that they see silver to trade between $36-38/oz in 2025.

Platinum added 0.8% to $930.09, and palladium gained 1.2% to $922.58. Both metals were on track for weekly gains.