Expanding U.S. Trade with Korea - An Easy Economic Stimulus
“This agreement will benefit the people of both our countries, boosting commerce, growing our economies, creating good-paying jobs….South Korea is already America's seventh largest trading partner, with two-way trade and goods alone reaching nearly $70 billion last year. And we believe this is only the beginning of our shared economic potential. As President Obama said at the G20 recently, we are committed to getting the free trade agreement passed.”
Enhancing the longstanding partnership between the United States and the Republic of Korea by enacting the KORUS FTA will bring important economic benefits and opportunities to U.S. businesses, farmers, and workers by immediately opening access for U.S. goods and services in Korea-one of the world's largest and most dynamic economies.
By securing a more open and competitive Korean market, the FTA will boost U.S. exports to and investment in Korea-generating new jobs and economic growth for both countries. To learn about the benefits of the KORUS please click here.
The Importance of Trade to the U.S. Economy
More than 57 million American jobs are directly supported by international trade.
Exports represent 13% of U.S. GDP, and exports have been the single largest contributor to economic growth, generating 48% of GDP growth from April 2007 to March 2008.
95% of the world's consumers live outside the United States.
Trade Between U.S. and Korea
- Korea = 7th largest U.S. trading partner
- Korea = 5th largest market for U.S. agricultural goods
- Korea = 2nd largest market for U.S. services in Asia
- Korea = 10th largest market for U.S. information technology
Overall Benefits of the KORUS FTA (USITC, 2007)
- U.S. GDP growth: $10.1~11.9 billion
- U.S. Merchandise Exports increase: $9.7~10.9 billion
Cost of Inaction
- A recent US Chamber of Commerce study found that America could suffer a net loss of more than 345,017 jobs, $20.3 billion in lost export sales and U.S. national output failing to grow $40.4 billion, if it fails to implement the KORUS FTA while the EU and Canada move forward to implement FTAs with Korea.
Tariff Elimination by the KORUS FTA
- U.S. exports to Korea face an average applied tariff of 11.2 percent, while the equivalent U.S. tariff on Korean exports is 3.7 percent.
Source: CRS Report for Congress, "The Proposed South Korea-U.S. Free Trade Agreement (KORUS FTA)," July 28, 2007
- With approval of the KORUS FTA, nearly 95 percent of bilateral trade in consumer and industrial products will become duty-free within three years-and almost all other tariffs will be eliminated within 10 years.
- The FTA creates significant new access in Korea for U.S. agricultural products, which now face an average applied tariff of 52 percent. Under the FTA, tariffs will be removed immediately on more than half of current U.S. farm exports to Korea-a value of $1.9 billion.
KORUS FTA will give U.S. businesses, workers and farmers an advantage over other global competitors in Korea's growing market.
- Korea has concluded an FTA with the European Union - a major agreement that could give significant advantages in the Korean market to many European service and manufacturing companies at the expense of American companies waiting to benefit from the KORUS FTA.
- Trilateral talks between Korea, Japan and China are moving ahead with the goal of establishing a massive regional market.
KORUS FTA will ensure that the United States not only remains competitive in the Korean market, but remains a strong competitor throughout Asia.
KORUS FTA - A Common Sense, Job Creating Trade Partnership