On February 3, The Honorable Sung Kim, Ambassador of the United States to the Republic of Korea; His Excellency, Han Duk-Soo, the Ambassador of the Republic of Korea to the United States; and Tami Overby, Vice President, Asia, U.S. Chamber of Commerce, President, U.S. Korea Business Council, joined OCBC and about 100 business leaders to discuss the U.S.-Korea Free Trade Agreement. Working to provide new market access, the Agreement will be the United States’ most commercially significant free trade agreement in more than 16 years. The U.S. International Trade Commission estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone will add $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea.
Under the FTA, nearly 95 percent of bilateral trade in consumer and industrial products will become duty free within five years of the date the FTA enters into force, and most remaining tariffs would be eliminated within 10 years.
For agricultural products, the FTA will immediately eliminate or phase out tariffs and quotas on a broad range of products. This will increase U.S. agricultural exports to Korea by 50 percent as almost two-thirds of Korea’s agriculture imports from the United States will be duty free upon entry into force.
The FTA will also provide U.S. suppliers with greater access to the Korean government procurement market. In addition to strengthening our economic partnership, the FTA would help to solidify the two countries’ long-standing geostrategic alliance.
As the first U.S. FTA with a North Asian partner, the FTA is a model for trade agreements for the rest of the region, and underscores the U.S. commitment to, and engagement in, the Asia-Pacific region.
Korea’s National Assembly is now considering the U.S.-Korea trade agreement. In addition to legislative approval in Korea, before the agreement can enter into force, each country must be able to demonstrate that it is in compliance with those obligations that will take effect on day one. Following ratification in Korea, the United States will schedule cooperative work with Korea on implementing the Agreement. The length of time necessary to implement trade agreements varies, but the President is committed to bringing this Agreement into force as soon as possible. For more information contact Matt Petteruto.