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Trump takes key U.S. ally by surprise on trade, missile defense

SEOUL, South Korea -- Contradicting President Trump, South Korea said Friday it has no plan to renegotiate a bilateral trade deal with the U.S., or to pay for the U.S. missile defense system being deployed on its territory.

South Korea's trade and defense ministries were reacting to President Trump's remarks that he will fix or end what he called a "horrible" bilateral trade deal with South Korea, and that he would make the Asian ally pay $1 billion for the THAAD missile defense system aimed at North Korea.

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Mr. Trump made the remarks in an interview Thursday with Reuters news agency during which he also said the U.S. could end up in a "major, major conflict with North Korea," but that his focus was on reaching a peaceful resolution to the crisis.

Woo Taehee, South Korea's vice trade minister, said the country was not notified of any trade renegotiation, and that there have been no working-level talks with the U.S. regarding the five-year-old trade deal.

Woo said the trade ministry was trying to confirm the details of the media reports on Trump's remarks. He said there have been "no pre-talks" with the U.S. regarding the issue.

The U.S.-South Korea free trade deal is not the only free trade pact that the Trump administration is reconsidering. Earlier this week the White House leaked the possibility of the U.S. abandoning the North American Free Trade Agreement. Mr. Trump called that off hours later, saying he would seek to revamp the trade deal with Canada and Mexico and pull out of NAFTA only if he couldn't secure a favorable deal.

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In a separate statement, South Korea's defense ministry said there is no change in its plan under which the U.S. covers the cost for operating THAAD, now being deployed in the country's southeast. Under an agreement reached during the administration of Trump's predecessor, President Obama, South Korea offers the land and facilities for THAAD but not the cost of operations, the Defense Ministry said.

The U.S. missile defense system, meant to deter North Korean aggression, has become a thorny issue between South Korea and China, which opposes it because its powerful radars can peer through not only North Korean but Chinese defenses. Chinese backlash over THAAD has been hurting South Korean businesses in China, South Korea's largest trading partner, and many in South Korea worry that the issue could damage South Korea's economic recovery.

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Some observers said the remarks could infuriate South Korean voters and spark anti-U.S. sentiment less than two weeks before the country's presidential elections.

In response to Mr. Trump's remarks, a spokesman for the leading presidential candidate, Moon Jae-in of the main opposition liberal party, repeated his earlier position that the current government should stop deploying THAAD and defer the decision to the next president. In a statement, Moon's camp questioned whether it was in line with the spirit of the security alliance for the U.S. to unilaterally ask South Korea to pay for the THAAD and to scrap the free trade deal.

Ahn Cheol-soo, a presidential candidate who supports THAAD, said the U.S. should stick to its agreement and cover the costs of the anti-missile system.