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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)
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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.

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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.

Business

Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
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Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat

Saudi Minister of Finance Mohammed Aljadaan stressed Sunday that the world economy is going through a “profound transition,” saying emerging markets and developing economies now account for nearly 60 percent of the global Gross Domestic Product (GDP) in purchasing power terms and over 70 percent of global growth.

In his opening remarks at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla, the minister said these economies have become an increasingly important driver of global growth with their share of global economy more than doubling since 2010.

“Today, the 10 emerging economies in the G20 alone account for more than half of the world growth. Yet, they face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”

“Unfortunately, more than half of low income countries are either in or at the risk of debt distress. At the same time global trade growth has slowed at around half of what it was pre the pandemic,” Aljadaan added.

The Finance Minister stressed that the Saudi experience over the past decade has reinforced three lessons that may be relevant to the discussions at the two-day conference, which brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics.

“First, macroeconomic stability is not the enemy of growth. It is actually the foundation,” he said.

“Structural reforms deliver results only when institutions deliver. So there is no point of reforming ... if the institutions are unable to deliver,” he stated.

Finally, he said that “international cooperation matters more, not less, in a fragmented world.”

Business

Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
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Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Sunday that world growth still lacks pre-pandemic levels, expressing concern as she expected more shocks amid high spending and rising debt levels in many countries.

Georgieva spoke at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla.

The two-day conference brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics to deliberate on policies to global stability, prosperity, and multilateral collaboration.

Georgieva said that the conference was launched last year in recognition of the growing role of emerging market economies in a world of sweeping transformations.

“I came out of this gathering .... With a sense of hope for the pragmatic attitude and determination to pursue good policies and build strong institutions,” she said.

Georgieva stressed that “good policies pay off,” and said that growth rates across emerging economies reached four percent this year, exceeding by a large margin those of advanced economies that are around 1.5 percent.