President Moves Preemptively on KORUS

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As we discussed last week, there were rumblings from the House International Affairs Committee about the treatment of the Kaesong Industrial Complex in the context of the Korea-US Free Trade Agreement (KORUS) legislation, with Rep. Brad Sherman (D-Ca) likening it to a “slave labor camp” and Committee chairwoman Ileana Ros-Lehtinen (R-Fl) and eight co-sponsors introducing legislation to enable re-listing North Korea on the terrorism list. In this context, some members of Congress were beginning to express reservations on KORUS, believing that it could create a loophole in the US sanctions regime, and/or afraid that a vote for KORUS could be depicted as a vote in favor of slave labor.

Last night the White House moved preemptively issuing an executive order reaffirming the sanctions regime, and specifically indicating that under the order “the importation into the United States, directly or indirectly, of any goods, services, or technology from North Korea is prohibited” (emphasis added).  This would seem to block the importation of “North Korean parts” via South Korean or other third party producers based at KIC.

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