(April 5, 2011) The U.S.-Korea Free Trade Agreement (FTA), which will open new markets to U.S. exports and, in turn, benefit American businesses, farmers, workers, and consumers will be considered April 7 by the U.S. House Ways and Means Subcommittee on Trade.
California Chamber of Commerce President and CEO Allan Zaremberg recently sent a letter to the committee chairman urge congressional approval of the pending Free Trade Agreement with Korea.
"Congressional leaders of both parties have indicated their intent to bring this agreement up for a vote in the months ahead, and it is critical to companies, workers, farmers, and ranchers in our state that you support this job creating trade agreement," Zaremberg wrote.
Also voicing support for the FTA is the California Coalition for Free Trade, a broad-based group of companies and business organizations working to secure a national free trade agenda.
FTA Background
On June 30, 2007, the United States concluded a trade agreement with South Korea, which is still awaiting congressional consideration. On December 3, 2010, the U.S. and South Korea agreed to the terms of a supplemental autos agreement that will foster greater market access for U.S. automakers.
On January 25, 2011, the Ways and Means Committee held its first hearing on this agreement, along with the pending trade agreements with Colombia and Panama. The South Korea trade agreement was also discussed at the Ways and Means Committee hearing with Ambassador Ron Kirk, on February 9, 2011. On March 7th, Ways and Means Chairman Camp (R-MI) agreed to Ambassador Kirk’s written request to begin technical discussions on the draft implementing bill, noting that discussions between congressional and administration staffs were scheduled for later that day. Technical discussions are ongoing.
South Korea
Passage of the FTA 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 California's fifth largest exporting partner. In 2010, California exported $8.1 billion to Korea.
Korea is a significant market for U.S. small and medium-sized companies, which make up a majority of U.S. businesses exporting to Korea.
Korea is a $1 trillion economy and is the United States' seventh largest goods trading partner. Korea's commercial relationship with the United States is largely complementary. In 2010, two-way trade between the two countries totaled over $87.7 billion. In 2010, U.S. goods exports to Korea were $38.8, a significant increase over the previous year, at $28.6 billion.
According to the International Trade Administration in the U.S. Department of Commerce, computer and electronic products accounted for 2 billion of California’s merchandise exports to Korea in 2010. 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 the FTA reductions as machinery manufactures accounted for $1.9 billion of the state’s merchandise exports to Korea in 2010.
The Republic of Korea is a longstanding and close U.S. ally, and a strong partner in advancing regional and global security. The FTA will reinforce this critical economic and political partnership by deepening the links between the countries as they work together to protect peace and prosperity in Northeast Asia.
More Information
More information on the FTA can be found on the Korea Trading Partner Portal on the CalChamber website, www.calchamber.com/Korea. Staff Contact: Susanne Stirling