WASHINGTON
DC – The United States and the
Republic of Korea
yesterday, April 1, successfully concluded a free trade
agreement that will create economic opportunities for their people
and enhance their economic and strategic
partnership.
“This is a historic moment for our
two countries. The United States-Korea Free Trade Agreement (KORUS
FTA) will provide U.S. farmers, ranchers,
manufacturers, and service providers exciting new market
opportunities in a growing, dynamic country. It will
contribute to Korea
The KORUS-FTA represents the
United
States’ most commercially
significant FTA in over a decade. The Republic of
Korea is the
world’s tenth largest economy, with a GDP of nearly $1
trillion. Korea is already the
United
States’ seventh largest goods
trading partner, with two-way goods trade in 2006 valued at
approximately $72 billion. When implemented, the KORUS FTA
will expand trade and investment flows between the two countries
across a comprehensive list of sectors.
Agriculture
Historically, Korea has been one of the
most protected agricultural markets in the world. The KORUS
FTA will create highly valuable new export opportunities for
American farmers and ranchers by eliminating and phasing out tariffs
and quotas on a broad range of products. Under the agreement,
over $1 billion worth of U.S. farm exports to
Korea will become
duty-free immediately. Most remaining tariffs and quotas will
be phased out over the first ten years the agreement is in
force.
Industrial Goods and Consumer
Products
Nearly 95% of bilateral trade in consumer and
industrial products becomes duty-free within three years of entry
into force of the Agreement, with most remaining tariffs eliminated
within 10 years.
Autos
The KORUS FTA will eliminate discrimination in
engine displacement-based taxes, long a significant impediment to
market access in Korea. The
agreement contains strong commitments to addresses the specific
standards-related concerns raised by U.S. auto manufacturers and to create
a working group to review auto-related regulations being developed
as an early warning mechanism to prevent new problems from arising
and to promote good regulatory practice in Korea. The
agreement also contains a special enhanced dispute settlement
mechanism for auto-related measures, with strong remedies to deter
actions on autos that are inconsistent with the agreement.
Textiles
With the inclusion of the “yarn forward” rule
of origin, the KORUS FTA will give apparel products from
Korea
preferential access to the U.S. market while supporting
U.S. fabric and yarn
exports and jobs. Textile and apparel makers in both countries
will benefit from a special textile safeguard and strong customs
enforcement requirements.
Investor
Protections
The agreement ensures that U.S. investors in Korea will have the same
rights and enjoy equal footing with Korean investors. These
rights will be backed by a stable, transparent legal
framework.
Services
The agreement will expand market access and
investment opportunities in a number of service sectors, including
telecommunications and e-commerce. The agreement will also
expand market opportunities for U.S.
audio-visual products.
Intellectual Property Rights
Protections
The agreement provides high-level standards
for protection and enforcement of intellectual property rights,
including trademarks, copyrights and patents, consistent with
U.S.
standards.
Labor Rights and Environmental
Stewardship
The agreement requires both countries to
enforce their own labor and environmental laws, ensures access to
legal mechanisms to ensure enforcement, and establishes mechanisms
to enhance cooperation in efforts to safeguard labor rights and
environmental protections.
Background:
The KORUS FTA was launched on February 2,
2006, and the first of eight formal negotiating rounds took place in
June 2006.
Korea was the world’s seventh largest
goods exporter ($284 billion) and importer ($261 billion) in 2005 –
the fourth largest in Asia.
Korea was also the
world’s tenth largest services exporter ($44 billion) and sixth
largest services importer ($58 billion) in 2004. Over the past
ten years, Korea’s real average
annual growth rate in trade was two and a half times the pace of its
GDP growth.
This FTA will strengthen the more than
fifty-year-old alliance between the United States and Korea and will underscore the
substantial U.S.
engagement in and commitment to East
Asia. The KORUS FTA will also help cement
important political and economic reforms that Korea has undertaken in
the past decade and help promote strong economic relations with the
region. |