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Korea Free Trade Deal
Ten years ago on June 30th 2007, the United States of American signed a trade agreement with the Republic of Korea called the United States-Korea Free trade Deal (KORUS FTA).
Hailed by the Office of the United States Trade Representative as “the United States’ most commercially significant free trade agreement in almost two decades,” the agreement detailed provisions to eliminate 95% of both nation’s tariffs on goods within five years of signing. Furthermore, the FTA detailed making 80% of consumer and industrial products that are exported from the US to South Korea duty free, and additionally detailed eliminating most of the remaining tariffs within a decade. Lastly, the FTA opened South Korea’s billion dollar services market to American markets, and gave support for American workers in a variety of service sectors.
Five years ago, on March 15th 2012, the KORUS FTA went into effect, and a month ago was the agreement’s five year anniversary. Has the Free Trade Agreement lived up to its expectations? Not according to the Trump administration.
On July 28th 2016, Voice of America reported that Trump had claimed KORUS FTA was a “job killing deal.” Then, on March 1st 2017, the Trump administration’s trade-strategy document detailed several criticisms against the KORUS FTA. According to the Weekly Standard Magazine, one of the major concerns held by the Trump administration is that the KORUS FTA would have a negative impact on the automobile administration.
However, according to the Economist magazine, KORUS FTA might not be the sole blame for America’s overall trade deficit with South Korea, which has doubled in the last six years. They propose that the weak exports problem is a result of a larger global issue, and that without the KORUS FTA, American exports of goods would have been even lower. As an example, the Economist sited the 30% rise in American exports of services that took place between 2011 and 2016. The Economist also quoted Philip Seng, chief executive of the United States Meat Export Federation, who expressed satisfaction with KORUS FTA’s impact on American meat exports, which rose 152% over the previous five years.
Ultimately, it can be postulated that the Free Trade Agreement has had both negative and positive results on various areas of US-Korea imports/exports. Furthermore, those negative and positive results are individual to industry. A radical dissolution of the KORUS FTA might be extreme but revisions to help bolster those imports/exports which are flagging could prove more beneficial.