(August 29, 2007) The California Chamber of Commerce yesterday hosted His Excellency Lee Tae-sik, Korean Ambassador to the United States, at an international luncheon forum where he discussed the U.S.-Korea Free Trade Agreement (FTA), currently pending before Congress, and enumerated the benefits of the FTA for California businesses.
Korea is California’s fifth largest exporting partner, and in 2006 California exported $7 billion worth of goods to Korea.
“We have a historic opportunity to create the third largest free trade area in the world after the European Union and the North American Free Trade Agreement,” said Ambassador Lee. “This is a far-reaching and comprehensive free trade agreement covering all aspects of our two nations’ economic relationship.”
The U.S-Korea FTA will lower tariffs and foster increased trade between both countries as a critical element of the U.S. strategy to liberalize trade through multilateral, regional and bilateral initiatives.
“Our two nations’ economies are increasingly compatible and intertwined,” said Lee. “Last year, Korea and the United States took the ambitious steps of pursuing a free trade agreement and after more than one year of intense negotiations, this past June, the landmark agreement was officially signed.”
In 2006, two-way trade between the two countries topped $78 billion. The FTA will increase U.S. exports to Korea by 54 percent and Korean imports to the United States by 21 percent, according to a report by the International Trade Commission.
Korea is the seventh largest U.S. export market in the world and the sixth largest market for farm exports. In 2006, U.S. exports to Korea reached $43 billion, with U.S. small and medium-sized companies accounting for a third of this total.
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| His Excellency Lee Tae-sik, Korean Ambassador to the United States. |
The United States should not miss this opportunity to advance into the Korean market, Lee explained. “For Korea, this FTA will provide U.S. businesses with a strategic springboard to strengthen their positions among the other dynamic economies of Northeast Asia,” he said.
The U.S.-Korea FTA would grant unprecedented access to the South Korean market. Under the FTA, nearly 95 percent of bilateral trade in consumer and industrial products becomes duty-free within three years of the FTA’s entry into force, including key U.S. exports such as electronic machinery and parts, auto parts, power generation equipment, most chemicals, and medical and scientific equipment.
U.S. farmers and ranchers would benefit from the fact that more than half of current U.S. farm exports to South Korea 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.
Along with trade, investment between the two countries is flourishing and is becoming increasingly two-way.
For U.S. investors operating in South Korea, the FTA establishes a stable legal framework that will protect all forms of investment. Under nearly all circumstances, U.S. investors will enjoy the right to establish, acquire and operate investments in South Korea on equal footing with local investors, and investor protections will be backed by a transparent, binding international arbitration mechanism.
From an economic standpoint, the potential benefits of the U.S.-Korea FTA to U.S. workers, farmers, manufacturers and service suppliers are undeniable.
“The relationship between our two countries is very special. This free trade agreement is very comprehensive,” Lee said. “The agreement covers the full range of trade-related areas from goods and services to intellectual property rights, competition, labor and the environment. The United States should not miss this opportunity to advance into the Korean market before others."
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.
Staff Contact: Susanne Stirling