The United States released its annual National Trade Estimate Report on Foreign Trade Barriers (NTE) on Tuesday, revealing an increase in the section devoted to South Korea relative to other countries compared with the previous year.
On Wednesday, South Korea’s Ministry of Trade, Industry and Energy announced plans to maintain stable trade relations with the U.S. They intend to communicate closely on non-tariff issues and convene the Korea-U.S. Free Trade Agreement (FTA) Joint Committee soon to finalize the implementation plan for non-tariff measures agreed upon last year.
In this year’s NTE, the U.S. reiterated ongoing concerns about digital regulations, restrictions on beef imports from cattle over 30 months old, automotive emissions regulations, and defense offset issues. A new concern was raised regarding the procurement process for artificial intelligence infrastructure.
The NTE is an annual report published by the Office of the U.S. Trade Representative (USTR) since 1985, as mandated by Section 181 of the Trade Act of 1974.
This report evaluates the trade environment and key tariff and non-tariff measures of about 60 major trading partners, including South Korea. It is based on input from U.S. stakeholders (businesses, associations, etc.) regarding export and overseas investment challenges, as well as information gathered by overseas missions.
This year’s NTE has expanded significantly from 397 pages last year to 534 pages.
The Ministry explained that the increase in overall length was due to the addition of sections on non-market policies and practices, labor, and environmental issues for major countries like the European Union and Japan. The section on South Korea also grew from 7 to 10 pages.
A new issue raised in this year’s report concerns the procurement of artificial intelligence infrastructure. The report criticizes a bidding process conducted by South Korea’s Ministry of Science and ICT last May for high-performance graphics processing units (GPUs) and cloud resources, claiming that U.S. companies were restricted or effectively excluded from participation.
Additionally, the report noted for the first time that South Korea has not established a cooperative framework with the U.S. to prevent tariff circumvention, such as through exports via third countries.
The report also mentions labor issues, stating that South Korea does not prohibit the import of products made with forced or compulsory labor. It raises concerns about South Korean laws that protect internationally recognized labor rights.
Several issues from previous reports were reiterated.
In agriculture, concerns included restrictions on U.S. beef imports from cattle over 30 months old, bans on processed beef products, agricultural quarantine delays, pesticide residue standards, and regulations on feed containing ruminant materials.
Digital sector issues included Cloud Security Assurance Program (CSAP) certification conditions, network usage fees, domestic processing requirements for location-based data, data localization regulations, restrictions on U.S. cloud services for national core technologies, and digital antitrust regulations.
The Ministry plans to address non-tariff barriers with the U.S. at the upcoming U.S.-Korea FTA Joint Committee meeting.
The Ministry reported that during the NTE drafting process, South Korean officials met with USTR representatives on February 3 to present the government’s position and engage in face-to-face consultations. They plan to hold the U.S-Korea FTA Joint Committee meeting soon to finalize the implementation plan for non-tariff agreements.