Message from the Embassy
On March 15th, we celebrated the two-year anniversary of the Korea-U.S. Free Trade Agreement (KORUS FTA), a landmark agreement that provided businesses an avenue for growth through international trade. The KORUS FTA has delivered immediate benefits for many American businesses and has ushered in a new era of trade with Asia's fourth-largest economy.
On March 13th, Ambassador Ahn Ho-young participated in the KORUS FTA Anniversary event, "Opening Doors: Two Years of U.S.-Korea Free Trade," which was hosted by the Korea Economic
Institute (KEI). In his remarks, Ambassador Ahn emphasized that both Korea and the United States have benefited from growth in trade in goods, services and investment under the KORUS FTA.
Ambassador Ahn Ho-young delivers remarks at the "Opening Doors: Two Years of U.S.-Korea Free Trade" event on March 13.
Ambassador Ahn pointed out that the United States experienced significant growth in services exports to Korea. In the past two years, U.S. exports of services to Korea grew by 25 percent, giving the United States an almost $9 billion services trade surplus. Impressive growth was also seen in Korean investment in the United States, which in 2013 exceeded U.S. investment in Korea by $2 billion. Exports of goods covered in the KORUS FTA also grew by 7 percent over the past year. On a more specific industry level, Ambassador Ahn revealed that Korean sales of cars from the "Big 3" grew by 40 percent, while overall U.S. exports of automobiles increased 80 percent compared to 2011. U.S. pharmaceutical exports also grew by 26 percent.
The first two years of trade under the KORUS FTA have seen great success, and we expect additional growth in bilateral trade of goods and services covered by the agreement in the coming years. To ensure continued success, the Embassy and the U.S. government are continuing to work closely to resolve those areas still in need of improvement. By working together, we can further strengthen economic and social relations between Korea and the United States.
Spotlight on the KORUS FTA
In the two years since the KORUS FTA was implemented, its benefits have been made clear by the increase in both exports and imports of beneficiary items, products for which the FTA reduced tariffs.
- Passenger vehicles (+79.5 percent)
- Packaged medicines for retail (+98.7 percent)
- Almonds (+104.6 percent)
- Reciprocating positive displacement pumps (+260.6 percent)
Source: U.S. Census Bureau
In its second year, the trade of goods and services between Korea and the United States reached an all-time high, with a total Korea-U.S. trade volume of $103.6 billion. This 1.8 percent trade volume increase over the previous year positions Korea as the United States' sixth-largest trading partner. As we enter the third year of trade under the KORUS FTA, three rounds of tariff reductions and eliminations have already occurred, further expanding U.S. access to the Korean market.
Although we have yet to see the full impact of the KORUS FTA, the United States and Korea have already experienced solid economic gains. As U.S. Trade Representative Michael Froman pointed out last week, strong results are emerging as the KORUS FTA enters its third year. For example, beginning in October 2013, total U.S. exports to Korea increased for four consecutive months compared to the same period the previous year.
For the last two years, the U.S. Korea Connectprogram has engaged companies, small and large, and provided tools, information and resources to help them take advantage of the KORUS FTA. We have gathered more than 130 success stories from businesses benefiting from the KORUS FTA. Through this outreach we have learned that the agreement's successes go far beyond the statistics and even expand the economic and cultural connections between Korea and the United States. In recognition of the second anniversary of the KORUS FTA, we have provided a sampling of the success stories from our website that illustrate the positive impact the agreement is having on businesses across the country.
Oregon Berry Packing, Inc., supplies high-quality berries to premium buyers around the world. As soon as the KORUS FTA took effect in March 2012, Oregon Berry Packing seized the opportunity to reach an untapped Asian market and became one of the first U.S. businesses to export fresh blueberries to Korea. In the first year of the KORUS FTA, Korea became Oregon Berry Packing's fourth-largest international market because of extraordinary demand for their berries. The KORUS FTA immediately reduced tariffs on fresh blueberries and continues to reduce tariffs by 4.5 percent annually until 2021 when they will be eliminated completely.
"In only two years, Korea has grown to our second-largest export market. We are very excited about growth opportunities in Korea and look forward to continued success." ~Trevor Abell, International Fresh Sales, Oregon Berry Packing, Inc.
Navistar International Corporation is one of the world's largest manufacturers of commercial trucks and buses, diesel engines and defense vehicles. Since the implementation of the KORUS FTA, Navistar has benefitted from reduced tariffs and increased its purchase of Korean automotive parts by approximately 15 percent.
Once the KORUS FTA was in force, Navistar also invested heavily in developing ProStar® trucks, a new line of commercial trucks designed specifically to meet Korean automotive requirements. This investment paid off and Navistar recently became the first U.S. truck manufacturer to deliver on-road commercial vehicles to Korea following the implementation of the KORUS FTA.
"Navistar is proud to be one of the first U.S. manufacturers to cultivate new commerce with Korea. Under the KORUS FTA, Korean truck drivers will now be able to experience the cost savings associated with the improved aerodynamics and fuel efficiency of aero-nosed on-road commercial trucks." ~ Tom Clevinger, Senior Vice President and General Manager of Navistar's global export operations
see more at http://www.uskoreaconnect.org/