The Office of the United States Trade Representative (USTR) announced it is negotiating to upgrade basic trade frameworks with South Korea, Japan, and the European Union into legally binding Agreements on Reciprocal Trade (ARTs).
While negotiations on such an upgrade are not currently underway between Seoul and Washington, observers note the U.S. may make such demands in the future, given the USTR's congressional report.
According to the "2026 Trade Policy Agenda and 2025 Annual Report" submitted to Congress on July 2 (local time), the USTR stated it has signed ARTs with Argentina, Cambodia, Indonesia, and Taiwan over the past 10 months.
"We have announced basic frameworks with South Korea, the EU, India, Japan, Switzerland, Thailand, and Vietnam," the report said. "USTR is actively negotiating to upgrade each framework to an ART or equivalent agreement."
The USTR described ARTs as "legally binding and fully enforceable," requiring trading partners to "significantly reduce tariff and non-tariff barriers on U.S. exports while the U.S. maintains additional tariffs above most-favored-nation rates."
"This will help increase U.S. agricultural and manufactured goods exports while reducing import dependence to achieve trade balance," the agency added.
If trade agreements become legally binding, Korea's flexibility in trade policy would be constrained accordingly.
The report also noted that Korea committed to eliminating discrimination in digital services legislation, including regulations on Coupang and network usage fees—items the U.S. has classified as non-tariff barriers.
"Korea has committed that laws affecting digital services will not discriminate against U.S. companies," the USTR said, referring to network usage fees and online competition regulations. On Korea's controls over cross-border data transfers, the report stated Korea "has promised to facilitate cross-border data transmission."
Korea also expressed willingness to cooperate on food and agricultural trade. The USTR said Korea "has moved to address non-tariff barriers affecting food and agricultural trade," including clearing the backlog of market access requests for U.S. horticultural products and streamlining regulatory approval processes for U.S. biotechnology products.
These items represent key issues the USTR has long identified as Korean non-tariff barriers against U.S. exports. The report cited chronic trade deficits as a core policy concern, stating: "The United States opened its markets, but other countries kept their markets closed to U.S. exports."
The agency emphasized that unbalanced free trade has deepened America's goods deficit and eroded its manufacturing base. The USTR criticized both Japan and Korea for "restricting U.S. companies' access to key industries through non-tariff barriers and sector-specific standards."
Regarding the joint fact sheet from last November's Korea-U.S. summit, the report highlighted that "Korea committed to investing $350 billion to rebuild the U.S. manufacturing base in key industries, with $150 billion earmarked for shipbuilding." It also noted Korea eliminated the 50,000-unit annual cap on importing U.S. vehicles compliant with Federal Motor Vehicle Safety Standards without additional modification requirements.
The USTR said it will "continue efforts to reduce tariff and non-tariff barriers in trade in 2026," noting it may launch new investigations or equivalent enforcement procedures under Section 301 of the Trade Act if necessary.
Following the Supreme Court's ruling against reciprocal tariffs, President Trump signaled he would continue tariff policies using Section 301. The administration plans to invoke Section 232, which allows tariffs on national security grounds, to protect critical minerals and industrial supply chains. The U.S. government has already imposed Section 232 tariffs on steel, aluminum, copper, and automobiles, with investigations pending on semiconductors and pharmaceuticals.