SEOUL, Jul. 23 (Reuters): Seoul will take a close look at the terms of a U.S.-Japan trade deal, South Korea's industry minister said on Wednesday, holding out the prospect of greater cooperation in the energy and industrial sectors ahead of key trade talks in Washington.

Japan and South Korea, manufacturing powerhouses and key U.S. security allies, compete in areas such as autos and steel, so Tokyo's trade deal will pile pressure on Seoul to reach a similar level of 15%, or better, by an August 1 deadline to avert reciprocal U.S. tariffs of 25%.

"Investors see the Japan-U.S. deal as a benchmark for the Korean deal," said Kim Sung-rae, an analyst at Hanwha Investment & Securities, adding that the agreement "would put pressure on Korean negotiators to come up with a similar, or better, deal."

South Korea's benchmark KOSPI index edged up 0.2% on Wednesday, while shares in automakers and suppliers rallied after the Japan-U.S. deal. Hyundai Motor rose 7.3% and Kia jumped 7.6%.

The finance ministry and the top trade envoy of Asia's fourth-biggest economy are set for high-level trade talks with U.S. counterparts in Washington on Friday.

Photo from Reuters