Trade Agreements between Us and Korea
Trade Agreements between US and Korea: An Overview
The United States and South Korea have a longstanding trade relationship that has only grown stronger in recent years. The two countries entered into a free trade agreement (FTA) in 2012 that aimed to boost bilateral trade and investment, bring down trade barriers, and create new opportunities for their businesses. Since then, the trade between the US and Korea has expanded significantly, with both countries benefitting from the free flow of goods and services between them.
Here`s a closer look at the trade agreements between the US and Korea and how they impact the two nations` economies:
The US-Korea Free Trade Agreement (KORUS FTA): The KORUS FTA is a comprehensive trade agreement that was signed in 2012 by the then-US President Barack Obama and South Korean President Lee Myung-bak. The agreement eliminated tariffs on over 95% of industrial and consumer goods within five years of implementation, increased access for US agricultural products, and opened up Korea`s services market for US businesses. It also strengthened intellectual property protections and created a transparent regulatory framework for trade.
Impact on the US economy: The KORUS FTA has been beneficial for the US economy in several ways. According to the Office of the US Trade Representative, US exports to Korea have increased by 35% since the agreement came into force. As of 2020, the US had a trade surplus in goods and services with Korea of $13.8 billion, an increase of 66% from pre-KORUS levels. The agreement has led to significant growth in US exports of agricultural products, including beef, pork, and poultry. It has also facilitated US access to Korea`s automotive and IT markets, creating new opportunities for US companies.
Impact on the Korean economy: The KORUS FTA has also had a positive impact on the Korean economy. Korea`s exports to the US have increased by 12% since the agreement was signed, and the country has become a major supplier of intermediate goods and components to the US. The FTA has helped Korean companies gain access to the US market, particularly in the automotive and electronics sectors. It has also led to increased foreign investment in Korea, as US companies seek to take advantage of the country`s open and transparent business environment.
The Trans-Pacific Partnership (TPP): The TPP was a proposed free trade agreement between 12 Pacific Rim countries, including the US and Korea. The agreement aimed to deepen economic integration among the member countries and eliminate tariffs on a wide range of goods and services. The TPP was signed in 2016 but never ratified by the US and several other member countries.
Impact on the US-Korea trade relationship: The TPP would have had a significant impact on the US-Korea trade relationship. It would have further expanded trade between the two countries and provided new opportunities for US companies in Korea`s services market. However, without the US`s participation in the TPP, the agreement is unlikely to have a direct impact on the current US-Korea trade relationship.
The US and Korea`s trade relationship is built on a strong foundation of economic cooperation and shared interests. The KORUS FTA has been a key driver of economic growth and increased trade between the two countries. As the global economy continues to evolve, the US and Korea must continue to work together to strengthen their trade relationship and ensure that their businesses can compete and succeed in the global marketplace.
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