Negotiations for the Korea-U.S. Free Trade Agreement (KORUS FTA) have been underway since 2007, when President George W. Bush signed the agreement into existence.Since then, the Obama administration has taken proactive measures to ensure the agreement's final passage, having visited South Korea in 2009.
Once confirmed, the agreement will the first Free Trade Agreement ever signed between the U.S. and a North Asian country. In a White House press release from December of last year, President Obama stated of the KORUS FTA, "We are strengthening our ability to create and defend manufacturing jobs in the United States; increasing exports of agricultural products for American farmers and ranchers; and opening Korea’s services market to American companies."
Results from the KORUS FTA could be dramatic. According to the U.S. International Trade Commission, estimates indicate that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea.
Once confirmed, the agreement will the first Free Trade Agreement ever signed between the U.S. and a North Asian country. In a White House press release from December of last year, President Obama stated of the KORUS FTA, "We are strengthening our ability to create and defend manufacturing jobs in the United States; increasing exports of agricultural products for American farmers and ranchers; and opening Korea’s services market to American companies."
Results from the KORUS FTA could be dramatic. According to the U.S. International Trade Commission, estimates indicate that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea.
Under the FTA, nearly 95 percent of bilateral trade in consumer and industrial products would become duty free within three years of the date the FTA enters into force, and most remaining tariffs would be eliminated within 10 years.
Yet, what of the implications for Arkansas? As detailed in our last blog post, Arkansas has benefited from steady increase in strong export shipments of merchandise. In 2009 exports totaled $5.3 billion; this was a gain of 36 percent since 2005, and Arkansas has almost doubled the U.S. goods exports over the same period.
Recent Arkansas trade statistics by category include the following below:
Chemicals- 51%
Food Manufactures- 15%
Metal Fabrication- 12%
Electrical Equipment,
Appliance and Components- 6%
All Other Categories- 18%
Yet, what of the implications for Arkansas? As detailed in our last blog post, Arkansas has benefited from steady increase in strong export shipments of merchandise. In 2009 exports totaled $5.3 billion; this was a gain of 36 percent since 2005, and Arkansas has almost doubled the U.S. goods exports over the same period.
Recent Arkansas trade statistics by category include the following below:
Chemicals- 51%
Food Manufactures- 15%
Metal Fabrication- 12%
Electrical Equipment,
Appliance and Components- 6%
All Other Categories- 18%
The effects of KORUS FTA include the elimination of consumer and industrial tariffs within five years, as well as portions of the U.S. agricultural exports tariffs immediately on entry. Consequently Arkansas is expected to see extensive growth in Chemical Manufacturing, Processed Foods and Agriculture, particularly soybeans, poultry and cotton.
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