The U.S. auto, agricultural and financial services industries are expected to be among top beneficiaries of this trade agreement which will facilitate higher sales of and lower trade tariffs on sales of U.S. products and services to the 49-million residents of South Korea.
Background of Korea - U.S. Free Trade Agreement
President George W. Bush completed negotiations of Korea-U.S. trade agreement on April 2, 2007. However, neither the U.S. Congress nor the National Assembly of South Korea ever approved or passed the agreement, due to inequities and deficiencies perceived by both parties.
When running for the White House, candidate Obama refused to support the Korea - U.S. free trade agreement because it didn't provide enough advantage for U.S. sales, particularly for the American auto industry.
On December 4, 2010, the Obama administration announced completion of renegotiation of numerous elements of the Republic of Korea - United State Free Trade Agreement, and boasted of environmental and labor standards and correction of the "large disparity between Korean auto sales to the U.S. and American car sales in Korea" per the White House.
Per Businessweek magazine on December 9, 2010:
"President Barack Obama has hailed the trade accord as a 'win-win' for both countries that offers more choices for Korean consumers and more jobs for American workers...FACT SHEET SUMMARY - Republic of Korea - U.S. Free Trade Agreement (Source - White House)
"(AFL-CIO President Richard) Trumka said the Korea pact... has lax provisions for determining where products are made in order to determine tariff liability. The deal doesn’t resolve human-rights concerns and 'does nothing to improve or strengthen the provisions negotiated by President George W. Bush in those key areas.' "
"The agreement is an integral part of the President’s efforts to increase opportunities for U.S. businesses, farmers and workers through improved access for their products and services in foreign markets, and supports the President’s National Export Initiative goal of doubling of U.S. exports in 5 years."
"The U.S. International Trade Commission has estimated that the tariff cuts alone in the U.S.-Korea trade agreement will increase exports of American goods by $10 billion to $11 billion. The Obama Administration is moving this agreement forward to seize the tens of thousands of American jobs supported by those exports – as well as the additional American jobs that will come from by breaking down non-tariff barriers keeping U.S. exports out of Korea, and by requiring stronger protection and enforcement of intellectual property rights in Korea."
"The agreement improves market access for U.S. auto companies by addressing ways Korea’s system of automotive safety standards have served as a barrier to U.S. exports. Similarly, the agreement addresses proposed Korean environmental standards that could serve as a barrier to U.S. exports – striking a balance that respects our shared desire to reduce the environmental impact of automobiles...
"Progress was made in several additional areas of automotive policy including on regulatory transparency and an acceleration of tariff reductions on electric cars that will encourage the development of green auto technologies."
"Under the agreement, U.S. exports of aerospace, automotive, consumer goods, electrical/electronic goods, metals, scientific equipment, and shipping and transportation equipment will gain duty-free access to the Korean market. Beyond tariffs, the agreement establishes strong new protections on intellectual property rights (IPRs)."
"The agreement’s provisions on cross-border services, telecommunications, and electronic commerce offer particular advantages to the information and communications technology service sector – an area where the United States excels – benefitting small- and medium-sized American enterprises without the resources to establish an office in every market they serve."
"The U.S.-Korea trade agreement creates new opportunities for U.S. farmers, ranchers and food processors seeking to export to Korea’s 49 million consumers, giving American agricultural producers more market access in two ways – by getting rid of tariffs charged when U.S. exports come into Korea, and by laying out a framework to tackle other barriers to U.S. exports –even those that might arise in the future."
"The financial services chapter in the U.S.-Korea agreement provides significantly improved market access into Korea for American financial services firms... Under the agreement, Korea also commits to treat U.S. financial institutions comparably to their competitors in the Korean market."
"The U.S.-Korea agreement expands U.S. firms’ access to the $100 billion Korean government procurement market, creating new opportunities for exporters, and ensuring that U.S. firms will get to bid on contracts on a level playing field with Korean firms... The agreement’s procurement obligations also maintain American environmental and labor safeguards."
"The agreement sets high standards for protection of workers’ rights in trade agreements – including obligations for Korea to respect fundamental labor rights, not to weaken the laws that reflect those rights in any way, and to effectively enforce labor laws designed to ensure a level playing field for American workers to compete."
"... the U.S.-Korea agreement contains groundbreaking environmental elements that were first outlined in the bipartisan, Congressionally-led May 10 initiative to incorporate high environmental standards into America’s trade agreements. Under the agreement, the Korean government... will be held to the same level of accountability for meeting environmental commitments as it is for meeting other commitments in the agreement."