Ambassador Ahn Ho-young
Greetings to friends and colleagues!
Three years ago this month, Korea and the United States implemented the most important free trade agreement in the Pacific region to date - the Korea-U.S. Free Trade Agreement (KORUS FTA). Since then, this agreement has strengthened the foundations of the Republic of Korea-U.S. Alliance, fostered closer partnerships between our people, and promoted economic growth and investment in both countries.
The economic benefits of the KORUS FTA are evident from the numbers. Bilateral trade volume has exceeded $100 billion each year the agreement has been in effect, including a record $145.2 billion in trade in goods and services last year alone. American exports to Korea are rising in many sectors, including agriculture, pharmaceuticals and automotives. Furthermore, our trade is extremely balanced, with trade in goods, services and bilateral investments all rising since 2012.
The success of the KORUS FTA has guided Korea's trade strategy in the years since its implementation. With the KORUS FTA as the "Gold Standard," we continue to pursue trade agreements with friends and neighbors around the world. This dedication to free and open trade drives our interest in joining the United States' other major trade initiative: the Trans-Pacific Partnership. It is in consideration of these developments that I express my appreciation for the agreement's contributions to all aspects of our bilateral relationship over the past three years. At the same time, I am resolved to continue working to strengthen the partnership between Korea and the United States.
The KORUS FTA entered into force three years ago, opening a dynamic market, making it simpler and faster to trade with Korea, and providing new ways for businesses to grow. Just three years into implementation, the large-scale impact of the KORUS FTA has manifested in a myriad of trade successes. U.S. goods exports to Korea in 2014 grew 6.8 percent over the previous year, reaching a record high $44.5 billion. Below are a few highlights from the manufacturing, agriculture, services and intellectual property sectors.
In 2014, U.S. exports of manufactured goods totaled $37.4 billion,
a 5.6 percent increase over 2013.
In 2014, U.S. agricultural exports to Korea totaled $6.9 billion,
a 31.2 percent increase over 2013.
In 2014, U.S. exports in services and intellectual property to Korea increased 24.4 percent to an estimated $20.7 billion in 2014, compared to $16.7 billion in 2011.
To learn more, click here to view the United States Trade Representative's KORUS FTA Third Anniversary Fact Sheet.
*Services figures above are from 2013 - the last full year of services data available.
Source: USTR KORUS Third Anniversary Fact Sheet
The Korea-U.S. Free Trade Agreement:
Celebrating Three Successful Years and Counting
March 15 marked the third anniversary of the entry into force of the KORUS FTA, delivering tangible benefits for businesses throughout Korea and the United States. In only three years, the trade in goods and services between Korea and the United States continues to grow, reaching an all-time high, with a total Korea-U.S. trade volume of $145.2 billion, up from $126.5 billion in 2011 (USTR).
As we embark on a fourth year of trade under the KORUS FTA, the agreement further expands U.S. access to Korea, which is already the United States' 6th largest trading partner and boasts a growing $1 trillion economy and 49 million consumers. Government, industry and business leaders are celebrating the KORUS FTA's anniversary and looking ahead to increased cooperation and success. Below are a few highlights from this groundbreaking agreement.
U.S. Trade Representative Commemorates the KORUS FTA's Anniversary
U.S. Trade Representative Michael Froman released a statement and fact sheet marking the three-year anniversary of the entry into force of the KORUS FTA. According to USTR, the U.S.-Korea trade and investment relationship is substantially larger and stronger than in 2011, and the KORUS FTA has contributed to a strong and successful 2014 for American exporters.
"After battling economic headwinds, our trade with Korea is expanding, American industries are gaining market-share across the range of sectors from autos and chemicals to film and telecom; and this past year in particular we saw a surge in U.S. goods and services being sold in Korea. Because we have made trade with Korea easier, farmers and ranchers are exporting "Grown-in-America" cherries, beef, cheese, and other ag products at record levels; labs and studios are providing Koreans with more "Created-in-America" medicines, apps, and Internet services; and businesses of all shapes and sizes are better able to sell "Made-in-America" goods in Korea."
"Made In America" Manufactured Goods Exports Grow
Year-on-year goods exports to Korea for 2014 were up 6.8 percent compared to 2013, a record level of $44.5 billion. Of this record high, manufactured goods accounted for $37.4 billion, a 5.6 percent increase in 2014. This growth is nearly four times greater than U.S. manufacturing export growth to the world at large - and is now 8.7 percent above pre-FTA levels. This growth has been strong across high-technology manufacturing, autos, heavy industry and consumer goods.
"Grown In America" Agricultural Products Exports Grow
U.S. agricultural exports to Korea grew 31.2 percent last year - seven times faster than average agriculture export growth with the world. Strong performers include dairy products, spirits, meats, nuts and fruits.
According to the U.S. Dairy Export Council, since the implementation of the KORUS FTA in 2012, U.S. dairy sales to Korea have increased 86 percent compared to the year before the FTA took effect, reaching a high of $417 million last year. The Distilled Spirits Council of the United States (DISCUS) reported that in the three years following the implementation of the KORUS FTA, U.S. spirits exports to Korea have soared by 71 percent to $14.5 million in 2014, up from $8.4 million in 2011.
U.S. Services and Intellectual Property Exports Grow
U.S. services exports to Korea continue to be a strong area of growth, up 24.4 percent to an estimated $20.7 billion in 2014, compared to $16.7 billion in 2011. This growth rate is nearly double the overall 13.1 percent growth of U.S. services exports to the world. The KORUS FTA gave U.S. services providers and investors new market access in Korea, and has provided increased access to Korea's market for U.S. express delivery services. The legal services market in Korea has also opened as a result of the KORUS FTA, and now more than a dozen U.S. law firms are offering legal services. In addition, Korea has undertaken reforms to allow U.S.-based financial institutions in Korea to process data in their regional and global offices. The KORUS FTA also created opportunities for U.S. investors to wholly own Korean telecommunications operators.
The KORUS FTA has also spurred cross-border investment between the two countries, and the United States continues to be the top destination for Korea's Foreign Direct Investment (FDI). For the first three quarters of 2014, Korea's FDI in the United States totaled $6.3 billion, and the U.S. FDI in Korea totaled $2.3 billion.
As we enter a new year of trade under the KORUS FTA, the Korean and U.S. governments are working closely to fully implement this gold-standard free trade agreement. In the days ahead, Korean and U.S. businesses will continue to see the broader benefits of this landmark agreement.
The U.S.-Korea Free Trade Agreement (KORUS FTA) is an international partnership designed to promote the free flow of products and services between the United States and Korea. This new economic relationship spurs business growth, creates jobs, generates new markets for U.S. goods and services, and strengthens an important strategic alliance.