Korea Pushes for Free Trade Agreement with US
06/04/10Source: SOCMA Blog
Related Topics: International Trade
By Justine Freisleben, SOCMA Government Relations Manager
During a recent briefing in Washington, Korean Trade Minister Kim Jong-Hoon (left) discussed the possible passage of the Korea-US free trade agreement (FTA) and other FTAs Seoul is currently negotiating.
He said the agreement would benefit the U.S. by:
- Strengthening relations with Korea
- Helping achieve the goals of the Obama Administration’s National Export Initiative. (Currently, 89% of the exports to Korea are from small business. The agreement would allow those companies to be more competitive.)
- Increase exports by approximately $10-12 billion
- Reduce 95% of the tariff lines to zero within 3 years, including chemicals which would go from 8% to zero.
- Allow US business to reach the rest of Asia from a regional hub – Seoul.
Minister Kim continually referred to the agreement as high in scope and ambition, saying it’s a model for the future of Asia Pacific trade. He expressed optimism about the current political climate, pointing to President Obama’s State of the Union address in which he mentioned the three pending FTAs with Korea, Colombia, and Panama, as well as a recent letter of support from Senators John Kerry (D-MA) and Dick Lugar (R-IN).
Korea is also negotiating FTAs with other countries and an agreement with the EU is imminent. If an EU agreement goes into force before a US deal is brokered, it could hurt American businesses. In the top 20 product categories, for example, the US and EU are in direct competition. Minister Kim said the main holdups with the Korea-US FTA have been in the auto sector, beef and non-tariff barriers (NTBs). He is currently waiting until the United State Trade Representative (USTR) wraps up talks with Congress on this issue, but expects that the matter won’t be resolved until after the midterm elections in November.
SOCMA has submitted comments to USTR in support of the Korea-US FTA. We believe it holds commercial opportunities for our members, and we continue to monitor any progress in addition to the outstanding FTAs with Panama and Colombia.
Do you see Korea as a market for your products? How would passage of an EU-Korea FTA affect your market access?For more information, visit http://blog.socma.com/?post=156
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