NEW YORK — The benefits and opportunities of the nascent U.S.-South Korea Free Trade Agreement were discussed in detail by officials from both governments at an event sponsored by the Korea Trade-Investment Promotion Agency and the Korean Chamber of Commerce & Industry in the USA.
Ryan Hollowell, international trade specialist at the U.S. Department of Commerce, said, “This agreement is a significant one for U.S. commerce and exports, marking the biggest free-trade agreement since CAFTA. It lowers significant barriers to trade and investment and increases access to the Korean market for U.S. business, and vice versa. As a result of this, the U.S. International Trade Commission estimates that the reduction of tariffs and duty-free status of many product categories alone will add $10 billion to $12 billion annually to the U.S. GDP and around $10 billion in U.S. merchandise exports to Korea.”
Hollowell noted that in signing the agreement, President Obama said it will add 70,000 jobs in sectors such as aerospace and chemicals, and that the cosmetics industry is expected to see 5 to 10 percent annual gains in exports. He added that in 2011, U.S. exports to South Korea reached $43 billion, representing a 12 percent increase. Hollowell also urged the businessmen and women in attendance to take advantage of a Web site, uskoreaconnect.org, that has been established to bring American and Korean businesses together.
Young-mok Kim, consul general of Korea in New York, noted that South Korea is the seventh-largest trading partner of the U.S., and the second-largest in the service market for the U.S. in Asia.
However, he noted that the U.S. has gone from being the largest to the fourth-largest trading partner, behind China, the European Union and Japan, even though two-way trade surpassed $100 billion last year for the first time. He said this still pales in comparison to the $500 billion in two-way trade between the U.S. and China last year.
“We need to catch up with trade with China by taking advantage of this agreement,” Kim added.
Korean officials also came armed with a boatload — the country is the largest ship builder in the world — of vital statistics about their nation to the conference, held here on May 21. South Korea, with the 15th-largest economy in the world and a gross domestic product of $1 trillion, had a 3.6 percent growth in 2011. The FTA with the U.S. made the country the only one in the world to have concluded such a pact with the world’s top three countries or trading blocs: the U.S., European Union and the Association of Southeast Asian Nations. It also has FTAs with Peru, Chile, Singapore, India and European Free Trade Association member countries Iceland, Liechtenstein, Norway and Switzerland, and has concluded a pact with Turkey.
In textiles, the U.S. provides duty-free access to 61 percent of Korean exports using a yarn-forward rule of origin, meaning only apparel and textile products using yarn from the U.S. or Korea qualify for preferential tariff treatment.