A key policy adviser to South Korea’s presidential frontrunner said yesterday he does not expect a renegotiated free trade agreement with the United States to hurt trade between the two major export nations.

“Statistics show the US has achieved much through the free trade agreement,” said Kim Kwang-doo, the head of frontrunner Moon Jae-in’s campaign advisory group, said in an interview.

“They [the US] have a trade deficit with us and they can complain about that, sure. But the deficit is partly due to the fact South Korean products have the upper hand when it comes to trade.”

US Vice President Mike Pence told business leaders in Seoul on Tuesday the Trump administration would review and reform the five-year-old free trade agreement between the US and South Korea.

South Korean government officials said Pence’s statement did not necessarily mean a complete overhaul of the agreement.

However, industry leaders are watching the situation closely, as are market participants who sold off the won and shares briefly on Tuesday following Pence’s comments.

Kim said Washington was likely to demand South Korea buy more US products, but in order to increase exports, the US would need to create products that South Korean customers would want.

“There won’t be any harm to the essence of what the trade agreement stands for,” he said.

Capital Economics said in a research note yesterday a renegotiated FTA would likely mean South Korea opens more of its economy to US companies but would “have a relatively small impact on the economy.”