South Korea expects arms, shale gas on U.S. agenda in trade talks

SEOUL (Reuters) - South Korea’s trade minister Kim Hyun-chong said on Friday the United States may demand that Seoul guarantees it will step up arms purchases and imports of U.S. shale gas if the two countries renegotiate a free trade agreement.

The comments, made at the parliament, came as Seoul indicted last week that it was open to talks on amending the five-year-old bilateral deal, which U.S. President Donald Trump had threatened to terminate unless it was renegotiated.

U.S. President Donald Trump said in his tweet last month that he was allowing Japan and South Korea to buy a substantially increased amount of highly sophisticated military equipment from the United States, amid rising tensions with North Korea.

Last month, Seoul deployed the four remaining launchers of the U.S. anti-missile system designed to protect against mounting threats from Pyongyang.

South Korea, the world’s second-biggest liquefied natural gas (LNG) importer after Japan, received its first LNG cargo under a 20-year supply deal with U.S. exporter Cheniere in early July through Korea Gas Corp.

Asked about China’s trade retaliation against South Korea’s decision to deploy a U.S. anti-missile defence system, Kim said Korea has not “abandoned” an option to file complaints to the World Trade Organization (WTO).

China had been taking punitive measures such as restricting tourism with South Korea against the deployment of the U.S. Terminal High Altitude Area Defence (THAAD) system as Beijing worries the system can threaten its security and undermine regional stability.

Reporting by Chang-ho Lee; Additional reporting by Hyunjoo Jin; Writing by Jane Chung; Editing by Simon Cameron-Moore