Washington Council on International Trade
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Korean President Lee's Speech at USKBC Gala Dinner, 17 April 2008
Korea FTA Headlines
_________________________
►Korean free-trade pact important for Washington
Guest column by WCIT President Kathleen Connors, Seattle Times, 23 April 2008
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►Korea and America Need Trade
Jin Park, Wall Street Journal, May 1, 2009
►Senators Urge Obama Push for Korea Trade Deal
Washington Post, April 21, 2009
►South Korea Stands Behind U.S. Free-Trade Pact
Los Angeles Times, April 10, 2009
US-KOREA Free Trade Agreement: A Clear Winner for Washington State
Background: The U.S. - Korea Free Trade Agreement was signed by the U.S. and Korean governments on June 30, 2007. This agreement, called KORUS, now awaits approval by the U.S. Congress. The most commercially significant U.S. trade deal in more than a decade, the FTA will bring important economic benefits and opportunities to Washington's farmers, businesses and workers by immediately providing new access for goods and services in Korea - generating new jobs and economic growth in Washington State.
Korea was Washington State's fifth-largest export market in 2007. By WCIT's calculations, Washington exporters currently pay an average of over $990,000 a day on the products they sell to Korea. Many of these tariffs go away completely or are reduced significantly on day one that the agreement is implemented. A compelling reason to make sure your congressman supports the U.S.-Korea FTA!
U.S. - Korea Trade Facts:
- Korea is the sixth-largest export market for US farmers globally. Korea imports nearly 70% of its food making it a critical agriculture market for U.S. farmers.
- In 2008, Korea was the United States 8th largest export market. The biggest exports to Korea include high-end products that supports well paying U.S. jobs including:
- electric machinery, sound, tv equipment and parts
- boilers, machinery, nuclear power reactors and parts
- optic, photography, medical and surgical instruments
- aircraft, parts and related equipment
- organic chemicals
- iron and steel
- vehicles and vehicle parts
Washington State - Korea Trade Facts:
| Rank | Commodity | 2006 |
2007 |
2008 |
% Change 06-07 |
% Change 07-08 |
Total |
2,494 |
2,991 |
3,383 |
19.89 |
13.12 |
|
|---|---|---|---|---|---|---|
| 1 | Cereals |
428 |
502 |
1,481 |
17.42 |
195.08 |
| 2 | Aircraft, Spacecraft, and parts thereof |
1,355 |
1,480 |
785 |
9.28 |
-46.97 |
| 3 | Mineral Fuel, Oil Etc., Bitumin Subst; Wax |
105 |
105 |
182 |
0.22 |
72.64 |
| 4 | Wood and Articles of Wood, Charcoal |
39 |
102 |
135 |
161.45 |
33.15 |
| 5 | Iron and Steel |
19 |
88 |
134 |
359.76 |
52.68 |
| 6 | Oil Seeds Etc., Misc Grain, Seed, Fruit, Plant, Etc. |
64 |
94 |
70 |
46.24 |
-25.84 |
| 7 | Industrial Machinery, Incl. Computers |
31 |
40 |
51 |
26.89 |
28.35 |
| 8 | Alluminum |
40 |
59 |
50 |
45.45 |
-14 |
| 9 | Electric Machinery, Etc, SOund, Tv, Parts |
74 |
64 |
49 |
-12.35 |
-23.27 |
| 10 | Paper and Paper Products |
36 |
41 |
48 |
26.97 |
20.22 |
- Korea is Washington States 5th largest export market, and has been a top 5 export market since 2006.
- Our top export products showed significant growth from 2007 through 2008.
- Agricultural/crop products increased 12%
- Petroleum and coal products increased 50%
- Forestry and logging products increased 23%
- processed food products increased 28%
- Significantly, Washington wine exports increased 38% from 2007, despite facing 15% tariffs that their international competitors don't face.
- Chile and Korea struck a free trade agreement in 2004 and removed tariffs on Chilean wine.
- Korea is a booming, high growth market for Washington State agricultural products
- In 2008, Washington State led the nation in crop prodcution exports to Korea
- Korea is Washington State's 5th largest agricultural export market
- In 2008, Washington State exported $310 million in agricultural products to Korea, an increase of 34% over 2007 figures.
Why KORUS is Good for Washington State:
- KORUS levels the playing field. Currently, the average applied tariff in Korea is three times greater than the US average. With KORUS, 95% of consumer and industrial goods will become duty-free under the negotiated agreement within 3 years.
- Nearly 95% of consumer and industrial products become duty-free within in the first three years of the agreement. This includes products such as electronic machinery and parts, auto parts, power generation equipment, most chemicals, medical and scientific equipment, and motorcycles.
- Two-thirds of U.S. food products will become immediately duty-free, including such Washington State commodities as wheat, soybeans, cherries, wine and potato products. Furthermore, the tariff on beef will eventually decline from 40% to 0%.
- Open Services Markets - Korea has agreed to open its services sectors well beyond its WTO commitments. That means that U.S. financial, express delivery providers, legal consultants, researchers, accountants, educators, health and environmental service, and telecom service providers have meaningful market access.
- High-tech companies benefit from Korea's elimination of duties on all products in the sector - a particular boon to Washington State. The agreement also contains state-of-the-art intellectual property protections.
- The opportunity for U.S. companies in software and services is compelling. In 2006, US companies exported $8.3 billion in computer technology and electronics to Korea. Korean consumers' consumption of software and services is growing at a rapid rate, given high domestic income coupled with the highest broadband penetration in the world. The average Korean makes over $23,000 a year, representing a large and growing consumer market.
- KORUS contains strong commitments to protect the environment and uphold internationally-recognized Labor Rights - with enforcement mechanisms to ensure compliance.
- The U.S.-Korea FTA (KORUS) is the most commercially significant trade agreement negotiated in 15 years. KORUS would be the largest FTA that South Korea has signed to date and would be the second-largest in which the US participates, after NAFTA. Together, our two countries' GDP exceeds $14 trillion annually. A report by the U.S. International Trade Commission estimated that the agreement would increase the US GDP by $12 billion, and U.S. exports to South Korea by as much as $11 billion.
Learn more about how KORUS benefits Washington State companies and workers
WCIT Research
US-KOREA Free Trade Agreement at a Glance
WCIT's policy briefing paper and support of the U.S.-Korea FTA (KORUS)
Read.
Helpful Links
Description of benefits of FTAs
from the U.S. Government's Export Portal
from the U.S. Trade Representative
"The Pros and Cons of Pursuing Free-Trade Agreements"
from the Congressional Budget Office, July 31, 2003
U.S. - Korea Free Trade Agreement
Brief summary by the Office of the U.S. Trade Representative
Read. (pdf)