US-South Korea trade deal happens while China embraces Kim Jong-un: A symbolic coincidence
The United States on Tuesday, March 27, greeted the successful renegotiation of its free trade agreement with South Korea, saying it would expand its access to the South Korean auto market even as putting a limit on the imports of steel and aluminium from its ally in East Asia.
The White House, besides hailing the development, also said that talks were in progress to reach a side agreement stopping both the nations from competitively devaluing their respective currencies to make trade gains.
The agreement was reached this week in principle to update the deal of 2012 which President Donald Trump had described as horrible. The updating happened as the culmination of talks that started last summer.
Last year, the US saw a trade deficit worth $10.3 billion in goods and services with South Korea.
A US official on the condition of anonymity praised Trump to undertake a renegotiation of the deal, saying he succeeded in making it a better agreement which would help the US workers' and business heads' interests.
For the Koreans, the renegotiation helped them avoid 25 per cent tariff on steel Trump had announced in March against all countries - friends or foes - raising the danger of a global trade war.
US-S Korea trade deal done at a time when Kim Jong-un visits China
While the US and South Korea reworked their economic relations, China and North Korea - the reverse camp allies - also took initiatives in the same period to improve their political bonding. The timing of the two developments might be coincidental but they are symbolic.
The US and its allies in East Asia have over the years grown an economic dimension of their relations and even if Trump's US has prioritised its own interests over the rest today, it hasn't meant a deep divorce between Washington and its allies like Seoul and Tokyo. This is because their geopolitics is closely related to their geo-economics.
In case of China and North Korea, on the other hand, the sole emphasis on the political aspect has seen a rowdy Pyongyang drifting away from Beijing and that President Xi Jinping has to take a soft stand on a weak neighbour to tame its temperamental leadership to serve Beijing's own security interests.
Had there been an equal economic relationship between the two countries, North Korea would have been easier to handle for Beijing leading to a more stable relationship between the two and a balance of power equation in East Asia.