One of the major topics discussed at the summit meeting between South Korean President Moon Jae-in and U.S. President Donald Trump in June was, of course, the Korea-U.S. Free FTA. Trump has expressed his discontent for the FTA, saying that it was “a really bad deal” because it was creating U.S. deficit. Trump argues that the bilateral trade deficit has taken place since the inception of the agreement in 2012. So what choice can the United States take? Theoretically, it has three options: bring the Korea-U.S. deficit issues to the dispute settlement process (DSP), try to amend the agreement or nullify the agreement.
   According to the articles and provisions of the FTA, there are four cases that either party can bring to the DSP: disputes involving interpretation/application of the agreement (Art.22.4), introduction of measures violating the agreement (Art.22.4 (a)), failure to obey the obligation, of the agreement (Art 22.4 (b)) and denial of the benefits guaranteed by the agreement (Art 22. (c)).
   If the United States believes that Korea has committed one of the four above-mentioned infringements, then the case could be brought in writing to the DSP. But the DSP is a very lengthy and tedious course which can take up 570 days or more. First, the issue has to be brought to the Joint Committee, and then transferred to the Dispute Settlement Panel (or the 'Panel', hereafter) if the issue is not resolved by the Joint Committee within

60 days. It could take as much as 126 days just to form the three-member Panel and another 225 days to file a final report. If a party does not agree on the final report of the Panel, then it can file a complaint within 45 days and further negotiations. Considering how long this process is, a DSP would be very unappealing for the Trump administration, which would seek a very fast and powerful solution to any incurring problems.
   Another option for the United States may be an amendment to the FTA. Article 24.2 stipulates that parties may agree, in writing, to amend the Agreement. An amendment shall enter into force after the Parties exchange written notifications certifying that they have completed their respective applicable legal requirements and procedures. But this amendment requires the consent of the other party, which seems to make an amendment almost impossible
   The last choice may be the nullification of the Agreement. Article 24.5 of the Agreement reads that one party can nullify the Agreement just by sending a written notice of nullification. The nullification requires neither consent nor assent. Just after 180 days of the written notice, the FTA becomes ineffective.
   Assuming the United States takes the nullification course, let’s think about the severe impact this would have on the U.S. economy. First, can the United States expect to create more jobs and strengthen economic growth by erecting higher tariffs and trade barriers against Korean exports? Definitely not. The vacuum created by banning Korea exports in the United States would be instantly filled by Japanese or Chinese products—a typical trade diversion. Korean exports and its economic growth may be hampered significantly, but that doesn’t translate into growing American exports and a strengthened U.S. economy. Second, Korean

antagonism against the United States will rise. The more the Korean economy is negatively affected by the nullification, the disdain towards the United States will be greater. Third, Korea will get even closer to China not just in economic matters but also in diplomatic and regional affairs. The Moon administration is fundamentally different from the previous administrations of Lee Myung-bak and Park Geun-hye, which were pro-American. The current Moon government is more like a neutral tightrope walker, balancing between China and the United States. And there is also a significant change in the politically potent age group, as more than 60 percent of the entire Korean population has neither experienced the American participation nor Chinese engagement in the Korean War. Thus, pro-American policies have become less and less appealing to this generation. Consequently, Trump taking a hard line approach to the Korea-U.S. trade issues will most likely not achieve anything.
   If the real intention of the United States is to achieve more burden sharing in the military presence in Korea, and/or to have more steadfast support for the Terminal High Altitude Area Defense (THAAD) system on the peninsula, all U.S. tactics should directly address these issues, instead of using the Korea-U.S. FTA as leverage. Many people are well aware that an extravagant trade surplus does not do any good for either country, and they are hoping that President Trump will understand the effect that his decision will have on the future.