Unlike NAFTA, the KORUS FTA renegotiation was not a complete overhaul, but more of a "refurbishing" of the agreement (as Ambassador Lighthizer put it the other day), one that was designed to avoid Congressional oversight. There are reports out now that the KORUS talks are complete, with what appears to be three major changes (from Reuters):
U.S. Truck Tariffs Extended
As part of the KORUS revision, the countries agreed to extend U.S. tariffs on Korean pickup trucks by 20 years until 2041.
No South Korean automakers currently export pickup trucks to the United States, but Hyundai Motor said last year it planned to launch a model there to catch up with a shift away from sedans.
Korean Vehicle Quotas Expanded
Under KORUS revisions, U.S. automakers will be able to bring into South Korea 50,000 vehicles per automaker per year that meet U.S. safety standards, not necessarily Korean standards, up from 25,000 vehicles previously.
Kim said no automakers previously exceeded the 25,000-vehicle threshold. Ford Motor Co and General Motors each shipped fewer than 10,000 vehicles last year.
Quotas on Korean Steel Exports Imposed
South Korea will be forced to cut its steel exports to the U.S. by 30 percent of past three years’ average
There may be other items as well, but all the news reports I've seen mention only these three.
If this is the entire deal, what should we make of this in terms of substance? On the first two items, one looks trade liberalizing and one looks trade restricting, but both may not have much impact in practice (for the reasons indicated in the Reuters article). However, the third one will have a negative impact on U.S. consumers (and possibly Korean producers, depending on the price effect), and will almost certainly violate Safeguards Agreement Article 11.1(b). Given the circumstances, what is the proper reaction here? Outrage that protectionism has increased and the rules-based system has been undermined? Or celebration that the outcome was not worse?
ADDED:
Inside US Trade reports on additional items:
Sources briefed on the currency language said USTR’s proposal went beyond what was negotiated in the Trans-Pacific Partnership talks, where the currency provisions were non-binding and outside the core text of the agreement. However, those sources added, the KORUS currency language is not as far reaching as some stakeholders and members of Congress had hoped.
...
According to MOTIE, the U.S. agreed to transparency obligations on trade remedies as well as investor-state dispute settlement -- two key demands on the Korean side.
