U.S.-Korea Free Trade Agreement
Join the California Coalition for Free Trade to help support the US-Korea Free Trade Agreement.
Act Now! Sample Letter of Support to Members of CA Congressional Delegation
President and Mrs. Bush to Travel to the Republic of Korea - whitehouse.gov - aug 4, 2008
On February 2, 2006, the United States and the Republic of Korea announced that they were beginning negotiations toward a bilateral Free Trade Agreement (FTA), with talks expected to take up to a year. The first round of negotiations on the U.S.-Korea FTA took place in June 2006, with further rounds in July, October and December. The United States concluded historic free trade agreement negotiations with Korea on April 1, 2007.
After a year-and-a-half of negotiations, U.S. President George W. Bush signed the U.S.-Korea Free Trade Agreement on June 30, 2007.
A successful FTA would be the biggest free trade pact the United States has reached since it entered into the North American Free Trade Agreement (NAFTA) over a decade ago. The FTA is pending US Congressional passage. The Korean Government is expected to take up the FTA in the Fall of 2008.
Benefits of U.S.-Korea FTA
Its passage will eliminate tariffs and other barriers to trade in goods and services, promote economic growth, and enhance trade between the United States and Korea.
Korea is a $1 trillion economy and is the United States' 7th largest goods trading partner. Korea's commercial relationship with the United States is largely complementary. In 2006, two-way trade between the two countries totaled over $82 billion. In 2007, U.S. goods exports to Korea were $34.7 billion, a steady increase over the previous five years.
In 2005, U.S. foreign direct investment in Korea totaled roughly $18.8 billion and was concentrated largely in the manufacturing, banking, and wholesale trade sectors. Korea currently enjoys broad access to the U.S. market and the United States is Korea's second largest market, importing 17 percent of Korea's worldwide exported goods.
Korea is California's 5th largest exporting partner. In 2007, California exported $7.5 billion to Korea.
The U.S.-Korea FTA will greatly expand market access in Korea for U.S. farmers, manufacturers, service providers, and financial services firms.
Under the FTA, more than half of current U.S. agricultural exports to Korea-with a value of $1.6 billion-will become duty-free immediately, including high-value agricultural products such as almonds, pistachios, wine and cherries. For many other key agricultural goods, such as pork and citrus products, the FTA will provide unparalleled access to the South Korean market and its prosperous consumer base.
Almost 95 percent of all bilateral trade in consumer and industrial products will become duty-free within three years under the agreement, and virtually all remaining tariffs on consumer and industrial goods will be eliminated in ten years.
Moreover, this agreement will eliminate significant non-tariff market access barriers in Korea to U.S. goods, services, and investment. Consumers in both countries stand to gain from the broad benefits of this agreement.
U.S. interests are protected under this agreement through robust provisions on transparency, intellectual property rights, competition, investment, and other rules, particularly in the area of services. The agreement also has important implications beyond bilateral trade and investment. By giving U.S. exporters and investors a preferential position in the world's eleventh-largest economy, an FTA with Korea will enhance U.S. businesses' ability to compete in the dynamic Northeast Asia regional economy. From a strategic vantage point, the FTA will reinforce the critical partnership and alliance between our two countries.
Korea is a significant market for US small and medium-sized companies, which make up a majority of US businesses exporting to Korea.
The Republic of Korea is a longstanding and close US ally, and strong partner in advancing regional and global security. The US-Korea FTA will reinforce this critical economic and political partnership by deepening the links between our countries as we work together to protect peace and prosperity in Northeast Asia.
For California, the FTA would be a big win. According to the International Trade Administration in the US Department of Commerce, computer and electronic products accounted for $2.3 billion of California's merchandise exports to Korea in 2007. With immediate removal of many of these related tariffs, exports will become more competitive and affordable to Koreans. California's exports of machinery also will benefit from U.S.-Korea FTA reductions as machinery manufactures accounted for $1.4 billion of the state's merchandise exports to Korea in 2007. Transportation equipment accounted for $590 million of the state's export sales to Korea in 2007 and most of these duties also would be eliminated immediately. In addition, tariffs and other barriers would be eliminated on most agricultural products produced in California.
CalChamber Position
The CalChamber, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business. New multilateral, sectoral and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
Reasons for Position
The U.S.- Korea Free Trade Agreement will send a strong signal that the United States intends to remain heavily engaged in the region for a long time to come in business, economics, security and international politics.
The FTA will strengthen a 50-year old alliance between the United States and South Korea, while reinforcing the economic and political reforms South Korea has made over the past decade.
Additional Resources
CalChamber Top Stories & Alerts
Articles
Sites
TradeAgreements.gov
U.S.-Korea FTA Business Coalition - uskoreafta.org
The KORUS FTA and the States
The Case for the KORUS Free Trade Agreement
KORUS FTA: Opportunities for Automotive Exports
KORUS FTA: New Opportunities for Financial Services
KORUS FTA: New Opportunities for Agriculture
KORUS FTA: New Opportunities for U.S. Manufacturers