U.S.-Korea Free Trade Agreement Goes into Effect March 15
A free trade agreement between the U.S. and South Korea is set to go into effect in two weeks. The Republic of Korea-United States Free Trade Agreement (KORUS FTA), passed by Congress and signed by President Obama in October, was part of a series of free trade negotiations intended to double American exports by 2015.
The trade deal will allow both U.S. and South Korean businesses to import most products and materials duty-free. Analysts predict that the agreement could lead to a 10 percent increase in trade between the two countries, with the present $90 billion annual spend increased up to $100 billion by 2017.
While the automotive and agriculture industries were the primary focus of the KORUS FTA, the deal will see tariffs reduced or eliminated for 95 percent of all goods and industries. For promotional products professionals, the biggest impact will be in the apparel sector. According to ApparelNews.net, the U.S. imported $928 million in apparel and textiles from South Korea in 2011, while it exported $418 million to the country in the same year.
The United States International Trade Commission, an independent federal agency that advises the president and both houses of Congress on commerce issues, predicted that the U.S. apparel industry would lose jobs as a result of the deal due to South Korean textile mills producing goods at 15 to 20 percent lower than their American counterparts. A report issued by the Economic Policy Institute, a liberal think tank, suggested KORUS FTA could result in the loss of 159,000 U.S. jobs in total.
Enforcement on KORUS FTA will begin on March 15. Similar free-trade agreements with Colombia and Panama, signed on the same day as the South Korean deal, have not been finalized.