The U.S. government has repeatedly called on Korean logistics company Hyundai Glovis to use ships registered in the U.S. when the company exports cars to the U.S., according to Seoul officials and company sources Thursday.

The Washington government’s continued push is seen by industry watchers as trade pressure on Korea in its attempt to offset trade deficits widening after the bilateral free trade agreement that took effect in 2012. 


U.S. government officials including Maritime Administrator Paul Jaenichen recently came to Korea to discuss marine policies with Korean officials from the Ministry of Oceans and Fisheries, sources said.

At the latest meeting held Thursday at Sejong City, South Chungcheong Province, representatives from Hyundai Glovis, a logistics unit of South Korean auto giant Hyundai Motor Group, were also present as the U.S. government called for their attendance.

The U.S. side asked the company to use their vessels, which often return to the U.S. empty after unloading goods in Korea. Hyundai Glovis said the U.S. officials have offered the same proposal several times from last year.

“We have turned down their offer several times because we already have our own ships and do not want to pay extra costs,” a Hyundai Glovis spokesperson told The Korea Herald by phone.

Hyundai Glovis is currently running 66 ships to export vehicles globally. As a major logistics company of the nation’s largest automakers Hyundai Motor and Kia Motors, it shipped around 200,000 units of their cars to the U.S. last year, a 31 percent share of total 640,000 units exported to the nation.

Apart from calling for the use of their vessels, the U.S. government also requested the company use their native sailors, whose wages are much higher than those of Korean sailors.

Both the Korean Maritime Ministry and Hyundai Glovis said there was no pressure from the U.S. government. But some experts said the U.S. move aims to offset its growing deficits in the vehicle sector amid growing calls from the U.S. politicians to narrow trade deficit of the two nations in the lead-up to the presidential election in November.

“We internally view the U.S. latest move as its push to the Korean ministry to do something to offset trade deficits -- although we are not able to admit it officially,” said a senior government official from the Ministry of Commerce.

According to the Korea International Trade Association, the trade deficit between the U.S. and Korea rose from $13.2 billion in 2011 to $28.3 billion last year after the free trade agreement of the two nations took effect in March, 2012. Among last year’s deficit, the Korea’s surplus in the automotive sector stood at $16.6 billion.

Following the news report, Hyundai Glovis’ share price dropped 4.7 percent to close at 172,500 won ($147.20) on Thursday, from the previous day.

By Shin Ji-hye (shinjh@heraldcorp.com)