Posted by Dorothy DwoskinSenior Director of Global Trade Policy and Strategy
The United States and South Korea are, once again, focused on realizing the benefits of enhanced trade and investment opportunities between our two countries. This is great news!
President Obama and South Korea’s President Lee agreed, on the margins of the G-20 Summit, to put the US- Korea FTA (Free Trade Agreement) (also known as “KORUS”) on a path towards approval. Trade Ministers are now working to meet the deadline of resolving outstanding issues by the time President Obama visits Seoul in November. As President Obama said, “It is the right thing to do for our country. It is the right thing to do for Korea. It will strengthen our commercial ties and create enormous potential economic benefits and create jobs here in the United States, which is my number one priority.” In Korea, there is a similarly strong sentiment about the importance of KORUS for the Korean economy.
KORUS was initialed by the two sides on June 30, 2007. However, concerns about the treatment of U.S. beef and autos raised doubts about whether it would ever be sent by the Administration for Congressional approval. Negotiators are now going to work to resolve these issues so that KORUS will become a reality. In the meantime, Korea has negotiated other FTAs with trading partners like the European Union, drawing from it parts of the very comprehensive model that U.S. and Korean negotiators established. With the agreement to resolve outstanding issues, the United States is now poised to take advantage of KORUS and resume its leadership on trade.
In his 2010 State of the Union address, President Obama set the important goal of doubling U.S. exports of goods and services in the next five years, an increase that will support 2 million jobs in America. Reaching this goal will require a concerted strategy of opening markets by eliminating trade barriers, strengthening global economic ties, and promoting fair competition. KORUS will strengthen the U.S. economy and bring important benefits to U.S. information technology companies such as Microsoft. The U.S. International Trade Commission estimated that KORUS would result in an increase in U.S. GDP of $10-$12 billion. Korea is today the 8th largest market for U.S. exports of goods and services. U.S. high tech exports to Korea were valued at $7billion last year.
KORUS includes wide-ranging commitments that will significantly increase opportunities for U.S. companies in Korea’s trillion-dollar market. For the U.S. IT industry, there are precedent-setting trade commitments in KORUS, including:
KORUS contains trade rules that will boost the competitiveness of U.S. technology companies and promote economic growth and job creation in the United States. KORUS is also a critical component of U.S. engagement in the dynamic Asia-Pacific region and it will create momentum for further trade liberalization in that part of the world.
We look forward to working with other stakeholders to support the goals set by the two Presidents. We commend the efforts already underway by the new bipartisan U.S. - Korea FTA Working Group launched in the House by Rep Adam Smith (D-WA) and Rep Dave Reichert (R-WA), Rep Diane Watson (D-CA), Rep Bobby Bright (D-AL), Rep Peter Roskam (R-IL) and Rep Eric Paulsen (R-MN).