SEOUL, May 14 (Korea Bizwire) – The latest steps by U.S. President Donald Trump to renegotiate the North American Free Trade Agreement (NAFTA) could undercut the price competitiveness of South Korean exports to America that are shipped through Mexico, according to experts Saturday.
The concern came as the Trump administration is anticipated to kick off official steps to renegotiate the free trade pact between the U.S., Canada and Mexico. Trump has been seeking to roll out protectionist policies while calling Washington’s trade deal with South Korea a “horrible deal.”
Experts said major changes in NAFTA will hurt the price competitiveness of U.S.-bound Korean goods that are shipped through Mexico.
In its latest report, the Korea International Trade Association said Mexico’s exports to the U.S. will drop significantly if Washington exits NAFTA or comes up with a higher tariff policy. Currently, around 84 percent of Mexico’s exports depend on NAFTA.
The report also added the Trump administration may also move its attention towards the Seoul-Washington free trade agreement in the near future. South Korea and the U.S. enacted the bilateral trade deal in 2012 after years of grueling negotiations.
“The outcome of the renegotiation of NAFTA will have major impacts on the Mexican economy as well as South Korea’s exports,” an official from the association said. “We need to find out ways to minimize the NAFTA risks.”