(September 8, 2010) Final approval of the U.S.-Korea Free Trade Agreement (FTA) will create American jobs, His Excellency Duk-Soo Han, ambassador to the United States from the Republic of Korea, told a California Chamber of Commerce gathering last week.
More than 50 guests greeted Ambassador Han at the international breakfast forum hosted by the CalChamber Council for International Trade on September 3. Attendees included California government officials and business people from California and South Korea, including representatives of agriculture, transportation, manufacturing and technology.
Ambassador Han's Remarks
For decades, the United States was Korea’s biggest trading partner. However, Korea lost that distinction to China in 2003. “Several years ago, our two governments decided that the best way to reverse this trend was to negotiate and ratify a bilateral free trade agreement that would knock down barriers on both sides of the Pacific,” Ambassador Han said.
The United States and Korea negotiated an FTA and signed it in 2007. Unfortunately, “it has been languishing ever since because of other, more urgent policy priorities in Washington D.C. and because of other concerns about some of its provisions,” Han said.
In June 2009, Korean President Lee and President Obama breathed new life into the agreement during their meeting in Toronto. President Obama said he wanted the concerns dealt with and the agreement finalized before he returns to Seoul in November for the G-20 Summit.
Korea FTA
Ambassador Han said that the U.S.-Korea FTA is about three things: jobs, economic growth, and security and shared values.
The FTA “offers one of the best opportunities to create American jobs by providing new market openings for U.S. manufacturers, farmers and small and medium-sized companies,” Han explained.
The U.S. Department of Commerce estimates that implementation of the FTA will create 70,000 new jobs in the United States.
Han explained to the group that expanding trade with Korea can be seen as “an economic stimulus package with no cost to taxpayers.”
The independent and non-partisan U.S. International Trade Commission estimates that passage of the U.S.-Korea FTA will increase U.S. manufactured goods exports by $11 billion and reduce the U.S. trade deficit by $4 billion.
Since 2006, the flow of direct investment from Korea to the United States has been greater than the other way around. In 2008, the United States invested $1.3 billion in Korea and Korea invested $6.3 billion in the United States. In 2009, two-way trade between the two countries totaled over $69 billion. In 2009, U.S. goods exports to Korea were $28.6 billion, a slight decrease over the previous year.
Ambassador Han said that the FTA will assure that America continues to have a strong partner in an increasingly important region. The FTA “will be a new bond that holds our two countries more tightly together,” Han said.
State and Local Benefits
California is second only to New York in the annual dollar value of its exports – $120 billion last year. It is second to none in the value of its exports to Korea – almost $6 billion last year.
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| (From left) Susan Corrales-Diaz, chair of the CalChamber Council for International Trade and president of Systems Integrated; and His Excellency Duk-Soo Han, ambassador to the United States from the Republic of Korea. |
Six of this state’s top 10 export commodities to the world face Korean import tariffs ranging from 5 percent to 50 percent. The Korea FTA will immediately eliminate all but one of them.
The FTA also guarantees American financial service companies operating in Korea all the legal rights and privileges that Korean firms enjoy. In addition, the FTA holds some of the strongest intellectual rights protections ever included in a free trade agreement.
Passage of the Korea FTA will spur other Korean firms to set up job-creating ventures here by expanding their ability to acquire, manage and operate investment properties in the United States.
No Time to Lose
Ambassador Han stressed that there is “no time to lose. The agreement was signed three years ago and at last we have an opportunity to finalize it.”
Last march the Ambassador met with Governor Arnold Schwarzenegger, who promised him two things: to visit Korea and to be a strong advocate for increased trade and economic ties between Korea and California.
Governor Schwarzenegger is going to make good on the first promise this week. He will travel to Korea on September 15 to sign a memorandum of understanding with his counterpart in Gyeonggi Province, the country’s largest local administrative region.
The visit is part of a trade mission that also will include stops in China and Japan. The September 9 - September 15 trade mission will focus on high speed rail, California products and services, investment in California, and travel and tourism.
In closing, Ambassador Han encouraged the group not to give up. “I ask you to employ your support for the Korea FTA. Your members will be quite well-served by your advocacy and Korea will be too.”
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.
For more information on the U.S.-Korea FTA visit CalChamber’s trade issues page at,
www.calchamber.com/USKoreaFTA.
Staff Contact: Susanne Stirling