The US SIGNS REVISED KORUS AGREEMENT
On Sept. 24, a revised Korea-U.S. Free Trade Agreement (KORUS) was signed by President Trump and South Korean President Moon Jae-in. Since KORUS went into effect in 2012, the U.S. trade deficit in goods with Korea increased by 75 percent from $13.2 billion to $23.1 billion (2017), while the overall deficit increased by 57 percent from $6.3 billion to $9.8 billion (2017).
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(NICHOLAS KAMM/AFP/Getty Images)
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Through negotiations to improve KORUS, the United States has secured changes that will reduce the trade deficit and ensure that KORUS is a good deal for American workers, farmers, ranchers and businesses. See below for the details of the agreement and statements from USMEF, NCBA, USDA and more.
“Signing of the revised KORUS agreement is reassuring news for the U.S. beef and pork industries. The market access terms secured in the original KORUS not only helped increase U.S. red meat’s market share in South Korea, but also bolstered consumption by making our beef and pork products more affordable and accessible to Korean consumers.
“The United States is the largest supplier of beef to Korea and trails only the European Union as the second-largest pork supplier. U.S. red meat exports to Korea set a record last year of $1.7 billion, up 19 percent year-over-year and up 69 percent from 2012, when KORUS entered into force. This trend continues in 2018, with both U.S. beef and pork export value increasing more than 50 percent compared to a year ago. Korea is now the second-largest value market for U.S. beef (after Japan) and fourth-largest for U.S. pork (after Japan, Mexico and China/Hong Kong).
“Under KORUS, most U.S. pork products now enter Korea duty-free. The duty rate on U.S. beef has been reduced from 40 percent to 21.3 percent and will continue to decline each year until it is eliminated by 2026. All major red meat competitors also now have free trade agreements with Korea, but the U.S. has benefited from KORUS being implemented earlier than most of these FTAs, providing the U.S. with a head start on tariff elimination. USMEF thanks our U.S. trade officials for recognizing the importance of the favorable terms included in KORUS, and maintaining them in the revised agreement.”
USMEF
Statement from U.S. Secretary of Agriculture Sonny Perdue:
“We are entering into a new KORUS agreement that is a better deal for the entire United States economy, including the agricultural sector. This represents an important improvement in trade relations between our two nations, building on long-standing cooperation we have enjoyed. This agreement adds to the momentum building for President Trump’s approach to trade, which is to stand strong for America’s interests and strike better deals. I am optimistic that the dominoes will continue to fall: KORUS, then a new NAFTA, and new agreements with the European Union, Japan, and, most notably, China. As an avid sportsman, I would say ‘put this one in the bag and keep hunting for more.’”
USDA
Statement from National Cattleman’s Beef Association Kevin Kester:
“KORUS is a prime example of how U.S. producers benefit from trade agreements that reduce tariffs and implement science-based standards. Less than a decade ago, U.S. beef exports to South Korea were severely limited by a 40 percent tariff and a host of non-tariff trade barriers. KORUS tore down those barriers, helping turn South Korea into a leading destination for U.S. beef. In fact, exports to South Korea accounted for over $1 billion annually over the last two years. We applaud President Trump for his leadership in improving KORUS for other sectors and we know that a modernized KORUS agreement will allow U.S. producers to continue focusing on what we do best: Providing safe, high-quality beef for Korean families to enjoy.”
NCBA
Fact Sheet on U.S.-Korea Free Trade Agreement Outcomes
President Trump continues to fulfill one of his key promises to the American people: to secure free, fair and reciprocal trade deals for the American worker.
The Republic of Korea is an important ally and key trading partner. Improving U.S.-Korea trade by rebalancing our trade and reducing the trade deficit will strengthen our economic and national security relationship.
Since the United States – Korea Free Trade Agreement (KORUS) went into effect in 2012, the U.S. trade deficit in goods with Korea increased by 75 percent from $13.2 billion to $23.1 billion (2017), while the overall deficit increased by 57 percent from $6.3 billion to $9.8 billion (2017).
Through negotiations to improve KORUS, the United States has secured changes that will reduce the trade deficit and ensure that KORUS is a good deal for American workers, farmers and businesses.
KEY NEW OUTCOMES FOR U.S. EXPORTERS
- The United States achieved important steps to improve the large trade deficit in industrial goods and to address KORUS implementation concerns that have hindered U.S. export growth.
- U.S. Truck Tariffs: Korea will extend the phase out of the 25% U.S. tariff on trucks until 2041, or a total of 30 years following the implementation of the KORUS FTA in 2012. (currently scheduled to phase out by 2021).
- Growing U.S. Auto Exports: Exports of U.S. motor vehicles to Korea will be improved through the following steps:
- Greater Access for U.S. Exports: Korea will double the number of U.S. automobile exports, to 50,000 cars per manufacturer per year that can meet U.S. safety standards (in lieu of Korean standards) and enter the Korean market without further modification.
- Harmonization of Testing Requirements: U.S. gasoline engine vehicle exports will be able to show compliance with Korea’s emission standards using the same tests they conduct to show compliance with U.S. regulations, without additional or duplicative testing for the Korean market.
- Recognition of U.S. Standards for Auto Parts: Korea will recognize U.S. standards for auto parts necessary to service U.S. vehicles, and reduce labeling burdens for parts.
- Improvements to CAFE Standards: Korea will expand the amount of “eco-credits” available to help meet fuel economy and greenhouse gas requirements under the regulations currently in force, while also ensuring that fuel economy targets in future regulations will be set taking U.S. regulations into account and will continue to include more lenient targets for manufacturers that sell small volumes of cars in Korea.
- Customs Improvement: Korea will address long-standing concerns with onerous and costly verification procedures through agreement on principles for conducting verification of origin of exports under KORUS and establish a working group to monitor and address future issues that arise.
- Pharmaceutical Reimbursements: Within 2018, Korea will amend its Premium Pricing Policy for Global Innovative Drugs to make it consistent with Korea’s commitments under KORUS to ensure non-discriminatory and fair treatment for U.S. pharmaceutical exports.
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- ~ Source: TSCRA and Executive Office of The President of USA
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