(October 22, 2010) South Korean Ambassador Duk-Soo Han met with electronics manufacturers in San Francisco on October 19, urging approval of the U.S.-Korea Free Trade Agreement (FTA).
The FTA was signed on June 30, 2007, but has yet to be approved by the U.S. Congress. Since that time, South Korea has successfully concluded an FTA with the European Union (EU) and is in advanced FTA negotiations with Canada. This increased competition from countries around the world threatens the economic benefit the United States and California stand to gain from exports to the Asian country.
In fact, it is estimated by the Trade Partnership Worldwide, LLC, that the failure to approve the U.S.-Korea FTA will result in a U.S. goods export loss of $35 billion, gross domestic product (GDP) loss of $40 billion and an employment loss of 345,000. The economic damage would be similar in California, with a goods export loss of $2.5 billion, GDP loss of $5.2 billion and an employment loss of nearly 40,000.
Ambassador Han told his audience in San Francisco that the EU has already agreed to pretty much the same deal and, unless the United States gets its act together, U.S. companies will find themselves at a disadvantage vis à vis European firms that will enjoy better access to South Korean markets starting in July, when an EU-South Korean trade pact takes effect.
But Han said the two-way flow of goods and services between the United States and Korea is already close to being in balance and that the agreement would expand those relationships to mutual advantage.
Ambassador Han shared a similar message with the California Chamber of Commerce during his presentation before an international breakfast forum hosted by the CalChamber Council for International Trade on September 3.
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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. |
Ambassador Han’s September 3 Remarks and Video
Benefits
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. Passage of the U.S.-Korea FTA will eliminate tariffs and other barriers to trade in goods and services, promote economic growth, enhance trade between the United States and Korea, and help expand market access in Korea for U.S. farmers, manufacturers, service providers and financial services firms.
In 2009, California exported $5.9 billion to Korea. Korea is a $1 trillion economy and is the United States’ eighth largest goods trading partner. Korea’s commercial relationship with the United States is largely complementary. In 2009, two-way trade between the two countries topped $69 billion. In 2009, U.S. goods exports to Korea were $28.6 billion, a slight decrease from the previous year. Under the FTA, more than half of current U.S. agricultural exports to 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.
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.
Action Needed
The CalChamber is urging members of the business community to contact California congressional representatives and urge support for the U.S.-Korea FTA.
For further information, visit www.calchamber.com/korea.
Staff Contact: Susanne Stirling