The implenentation of the U.S.-Korea Free Trade Agreement (KORUS FTA) has created exciting new opportunities for Hawaii businesses and communities. Removing tariffs on goods and restrictions on services has strengthened the U.S.- Korea economic partnership by spurring business growth, creating jobs, opening new markets and providing access to a larger pool of consumers.
Known as “The Aloha State,” Hawaii is home to a wide range of businesses, from agriculture to marine products. These organizations are capitalizing on expanded opportunities created by the reduction of tariffs, elimination of trade barriers, and the free flow of products, services and ideas between Hawaii and Korea.
Below are a few of the products that benefit from the KORUS FTA.
O p p o r t u n i t i e s f o r H a w a i i
www.USKoreaConnect.org • The Embassy of the Republic of Korea
Trade Growth Jobs
• Hawaii exported $39.6 million in goods to Korea in 2015.
• Hawaii imported $214 million in goods from Korea in 2015.
• The KORUS FTA more closely connects Hawaii businesses with Korea, a $1 trillion market with more than 50 million consumers.
• The KORUS FTA is a significant and important catalyst for job creation in Hawaii.
Hawaii’s Top Trade Items with Korea
(2015) ExportsPetroleum and coal
$9.6 million Meat products and packaging
$5.2 million
Sugar and confectionery products
$4.2 million
Fruits and vegetable preserves
$2.0 million Foods
$1.6 million
Electrical equipment
$1.5 million Timber and logs
$1.5 million
Hawaii’s Top Beneficiary Trade Items
Exports Agriculture/Food
• Cocoa powder
8% tariff being eliminated over 5 years
• Coffee
2% or 8% tariff eliminated immediately or over 5 years
• Seaweeds and other algae fit for human consumption
10% to 45% tariff eliminated over 3~10 years
• Cookies (sweet biscuits) 8% tariff being eliminated over 5
years
Imports Agriculture/Food
• Sauces, seasonings and mixed condiments
3.2% to 7.5% tariff being
eliminated immediately or over 5 years
• Prepared pasta
6.4% tariff eliminated immediately Other
• Fish hooks, snelled or not snelled 4% or 4.8% tariff eliminated
immediately
• Plastic containers, bags and cases 3.4% to 20% tariff eliminated
immediately
Imports
Petroleum and coal
$170.0 million Semiconductors and components
$17.7 million Plastic products
$2.5 million
Soaps and cleaning compounds
$2.4 million Fabrics
$2.0 million Apparel
$2.0 million
Resin, rubber and synthetic fibers
$1.8 million
www.USKoreaConnect.org
Businesses around Hawaii are taking advantage of opportunities from the KORUS FTA and the strong relationship between the United States and Korea.
Watch Us Grow Together
Industry: Services
Profile: Tradewinds Global helps American companies enter Asian markets and grow their business overseas. The four-employee company, which was founded in 2005, serves manufacturers in the pet, children, food and beverage, and health and beauty industries. Tradewinds Global offers distribution, negotiation, international marketing, account management, translation and other services necessary for American companies to succeed in international markets.
Exports: Since 2007, Tradewinds Global has helped its clients export products to Korea. The company currently works with six clients in Korea that sell American products there, including companies that sell children’s products, pet products, and health and beauty products.
Tradewinds Global has seen its business in Korea grow over the past several years as the country’s economy has remained strong despite a global downward trend.
Growth: Under the KORUS FTA, Tradewinds Global has seen more American companies put Korea on their radar, search for ways to enter the robust market, take advantage of reduced tariffs and grow their business in Asia. The KORUS FTA has also increased many Korean companies’ interest in pursuing business relationships with American manufacturers.
Industry: Services
Profile: Hawaii Exports International, Inc. (HEI), established in 2009, helps Hawaiian companies and products enter international markets.
The company works primarily with small to medium sized organizations interested in exporting for the first time. HEI assists with all aspects of exporting, including developing an export business plan, finding in-country partners, attending trade shows and advertising.
Trade: Through its clients, HEI exports Hawaiian consumer goods including macadamia nuts, coffee, tea, sea salts and Spirulina nutraceutical products to eight countries. It started trading with Korea in 2010, when it connected a participant from a Korean trade mission to Hawaii with Kona and KA’U coffees.
Growth: For HEI, the KORUS FTA lifts tariffs on many of the products that its clients export to Korea. To capitalize on opportunities for its clients, HEI is currently talking with a major retailer interested in selling and marketing Hawaiian coffee and nut products throughout Korea. HEI also began collaborating with the Hawaii Department of Agriculture, the U.S. Commercial Service, the Western United States Agricultural Trade Association and the Korean Chamber of Commerce in Hawaii to identify new tools and opportunities to expand its clients’ business in Korea.
Hawaii Exports International
Honolulu, Hawaii
Industry: Agriculture
Profile: With its first harvest in 2004, MauiGrown Coffee Distributors, LLC became the only coffee grower native to the island of Maui. With 15 employees and about 420 acres, MauiGrown Coffee currently grows between 300,000 and 500,000 pounds of coffee per year, consisting of four varieties:
Yellow Caturra, Red Catuai, Guatemalan Typica and its signature variety, Maui Mokka.
Exports: MauiGrown Coffee started exporting to Asia through a broker in Japan, where its coffee has grown in popularity over the past several years. Hoping to expand its reach throughout the region, MauiGrown Coffee received its first direct sale to Korea on August 1, 2012, for nine bags (900 pounds). MauiGrown Coffee has grown its sales to Korea considerably in the years since.
Growth: MauiGrown Coffee continues to establish itself in Korea by gradually increasing its sales. The company is optimistic about its venture into Korea. With the elimination of an 8 percent tariff on coffee, the KORUS FTA has helped that process.
Tradewinds Global
Honolulu, Hawaii
MauiGrown Coffee Distributors
Lahaina, Hawaii
Left photo: MauiGrown Coffee’s coffee beans being collected at harvest.
Right photo: The Ka’anapali Estate sits below Pu’u Kukui, the second wettest spot in the world and the highest peak in West Maui.
www.USKoreaConnect.org
Interesting Facts About Trade with Korea
Support From Around Hawaii
Connections Beyond Trade
• The only state to grow cocoa or coffee beans, Hawaii exported $868,000 in coffee to Korea in 2015, 3 times the 2011 total of $298,000.
• Hawaii exported $1.5 million worth of fruit juice to Korea in 2015, an increase of more than 4 times over its 2013 total of just $373,000.
• Often associated with the ukulele, Hawaii exported $201,000 in string instruments to Korea in 2015, nearly 3.5 times its 2011 total of $58,000.
• 2015 exports of rough wood from Hawaii to Korea in 2015 reached $1.5 million, over 21 times the 2014 total of only $71,000.
Hawaii Exports Soar February 28, 2015
Merchandise exports from Hawaii soared to $1.5 billion last year, a new record that contributed to the nearly
$2.35 trillion in goods and services exported nationwide...promising areas for growth are markets in Australia and Canada, which also reflect strong visitor arrivals to Hawaii, as well as South Korea, where a free trade agreement was forged 3 years ago.
How Hawaii’s Economy Benefits from International Trade &
Investment January 23, 2015
In 2013, $354 million of Hawaii’s goods exports, or 51 percent, went to FTA partners. [...] Hawaii’s exports to Korea of computer equipment have jumped from $92,000 to $1.4 million in the two years since the FTA with Korea went into effect.
Asia Minute: Korean Cosmetics Taking Over the World?
April 10, 2016
[Cosmetics] is a niche that has led to several new stores in Hawaii over the past few years - and continues to be a growing part of Korea’s international trade...exports of cosmetics rose more than 53% last year to nearly $2.5 billion.
• In 2014, it was estimated that there were 22,130 Koreans and Korean Americans living in Hawaii.
• There were approximately 504 students from Korea studying at colleges and universities in Hawaii during the 2014/2015 academic year.
• January 13, 1903, marked the beginning of Korean immigration to the United States when the SS Gaelic docked in Honolulu carrying 102 Koreans.
• Both Hawaii and Korea honor varieties of hibiscus as their official flower.
Korea’s flower is the hibiscus syriacus, known as the Rose of Sharon (Mugunghwa in Korean) and Hawaii’s is the yellow hibiscus, known as the pua aloalo.
Jeju-do, the volcanic island located south of mainland Korea, is often called “The Hawaii of Korea” for its breathtaking views and beaches.
www.USKoreaConnect.org • The Embassy of the Republic of Korea
National Snapshot
The U.S.-Korea Free Trade Agreement (KORUS FTA) is an international partnership that connects the United States with the dynamic and growing Korean and Asia-Pacific markets.
All figures in U.S. dollars. Information based on data from the U.S. International Trade Commission, U.S. Dept. of Agriculture, U.S. Census Bureau, Ministry of Trade, Industry and Energy of Korea, Export-Import Bank of Korea, Korea International Trade Association, Bureau of Economic Analysis, the Institute of International Education, the International Monetary Fund, the World Trade Organization, and the U.S. Dept. of Commerce.
Last updated: April 2016
U.S. Korea Connect’s LinkedIn, Facebook and Twitter profiles help businesses connect with one another and learn more about taking advantage of the KORUS FTA. As a member of our online community, you’ll have exclusive access to data, research, events and information that can help give you a competitive advantage. Visit www.USKoreaConnect.org/Business-Connect to connect, collaborate and succeed.
Please visit our website at www.USKoreaConnect.org for information on how to contact local business groups and the Embassy of the Republic of Korea.
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KORUS FTA at a Glance
• Before the KORUS FTA, U.S. exports to Korea faced an average applied tariff of 12.1%, while the average U.S. tariff on Korean exports was 3.5%.
• More than 95% of U.S. exports will become duty free within 5 years, and almost all tariffs will be eliminated within 10 years.
• The KORUS FTA contains strong provisions regarding transparency, intellectual property rights and competition, particularly in the services sector.
• The free trade agreement makes U.S. businesses more competitive in Korea and provides a model for future trade agreements.
About Korea
• Population: 51.5 million (January 2016)
• GDP per capita (nominal): $28,338 (2015)*
• GDP (PPP-based): $1.9 trillion, ranking Korea the world’s 13th largest economy (2015)*
• GDP (nominal): $1.4 trillion (2015)*
• Real GDP growth rate: 2.6% (2015)*
• In 2014, Korea was ranked 7th and 9th, respectively, among leading exporters and importers in world merchandise trade.
*Projected figure
Korea-U.S. Connections
TRADE RELATIONS
• The United States exported $43.5 billion worth of goods to Korea and imported $71.8 billion worth in 2015.
• Korea is the United States’ 6th largest trading partner, while the United States was Korea’s 2nd largest.
INVESTMENT**
• U.S. foreign direct investment (FDI) in Korea was
$5.5 billion in 2015.
• Korea’s FDI in the United States was $10.4 billion in 2015.
**All investment figures are on a notification basis as reported.
