The National Association of Manufacturers is pleased by the news today that finally, the U.S.-Korea trade agreement will take effect on March 15, 2012. The United States has exchanged diplomatic notes with Korea in which each side confirmed that it had completed applicable legal requirements and procedures for the agreement’s entry into force.
According to the U.S. Government, on March 15, almost 80 percent of U.S. exports of industrial products to Korea will become duty-free, including aerospace equipment, agricultural equipment, auto parts, building products, chemicals, consumer goods, electrical equipment, environmental goods, all footwear and travel goods, paper products, scientific equipment and shipping and transportation equipment.
This matters because Korea offers U.S. manufacturers a growing opportunity for exports within a dynamic and expanding market. Korea is our seventh-largest trading partner and is a crucial export destination for U.S. manufacturing. Korea is one of the fastest-growing industrial economies in Asia, and its GDP has grown by 67 percent since 2000, according to the International Monetary Fund (IMF).
Small and medium-sized manufacturers will strongly benefit from the U.S.-Korea agreement: nearly 19,000 small and medium-sized companies export goods to Korea, representing 90 percent of total U.S. exporters. Manufactured goods are the vast majority of U.S. exports to Korea. In 2010, the U.S. exported $31.6 billion worth of manufactured goods to Korea, and Korea was our fastest-growing export destination in the world, with a 37 percent increase over 2009 exports. Manufactured goods make up over 75 percent of total U.S. merchandise exports to Korea.
The U.S.-Korea free trade agreement (FTA) will result in an $8 billion increase in exports of U.S. manufactured goods to Korea, according to the U.S. International Trade Commission (USITC). These exports include $6.5 billion in machinery, $6 billion in chemicals, $6 billion in computer and electronics products, $3.8 billion in transportation products and $2.3 billion in processed food products.
It’s doubly important that we get access to this market fast because the European Union’s trade agreement went into effect last year, and the United States stands to fall behind in that important market if the United States didn’t act quickly. We urge manufacturers in the U.S. to consider exporting to this dynamic market that knows and likes products manufactured in the U.S.
Stephen Jacobs is senior director of international business policy, National Association of Manufacturers.
Latest posts by Stephen Jacobs (see all)
- President Issues Executive Order to start Trade Enforcement Center - February 28, 2012
- U.S.-South Korea Free Trade Agreement to Take Effect in March - February 21, 2012
- Protecting Intellectual Property Critical to Manufacturers - February 10, 2012