With the implementation of the U.S.-Korea Free Trade Agreement (KORUS FTA) there are exciting new opportunities for Virginia businesses and communities.
By removing tariffs on goods and restrictions on services, this strengthened international partnership is spurring business growth, creating jobs, opening new markets and providing access to a larger pool of consumers.
Virginia, known as “The Old Dominion State,” is home to a wide range of businesses, from agriculture to technology. 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 Virginia 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 V i r g i n i a
www.USKoreaConnect.org • The Embassy of the Republic of Korea
Trade Growth Jobs
• In 2013, Virginia exported $368.8 million in goods to Korea, a 17.5%
increase from 2012 to 2013.
• In 2013, Virginia imported $191.3 million in goods from Korea, a 6.1%
increase from 2012 to 2013.
• The KORUS FTA more closely connects Virginia 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 Virginia.
Virginia’s Top Trade Items with Korea
(2013) ExportsResins and synthetic fibers
$92.6 million Pulp and paper
$31.9 million
Semiconductors and components
$31.4 million Clays
$22.2 million Soaps, cleaning compounds and toiletries
$19.4 million Iron and steel
$17.2 million Plastics
$12.8 million Virginia’s Top Beneficiary Trade Items
Exports Agriculture
• Tobacco (partly or wholly stemmed)
20% tariff being eliminated over 10 years
Textiles
• Yarn of cellulose acetate 8% tariff eliminated immediately
• Polyamides (e.g. for use in textiles, carpet or automotive)
6.5% tariff eliminated immediately
Other
• Perfumes
6.5% or 8% tariff eliminated immediately or over 3 years
Imports Textiles
• Synthetic polyester fibers 4.3% tariff eliminated immediately
• Ceramic tableware and kitchenware 6% to 25% tariff eliminated
immediately or over 10 years
• Synthetic yarns and nylons 8% or 8.8% tariff eliminated
immediately
Other
• Molds for rubbers and plastics (injection/compression type) 3.1% tariff eliminated immediately
Imports
Resins and synthetic fibers
$25.8 million Motor vehicle parts
$22.2 million
Semiconductors and components
$21.2 million Fabricated metals
$14.4 million Plastics
$12.5 million
Household appliances
$9.6 million Foundries
$6.5 million
www.USKoreaConnect.org
Businesses around Virginia are taking advantage of opportunities from the KORUS FTA and the strong relationship between the United States and Korea.
Watch Us Grow Together
*Left photograph: An F-15K Slam Eagles delivered to the Republic of Korea Air Force (ROKAF) on April 2 at Daegu Air Base (c) Boeing Right photograph: FURminator® deShedding Tools in Asian packaging
Communications-Applied Technology
Reston, Virginia
Industry: ManufacturingProfile: Since 1982, Communications-Applied Technology (C-AT) has designed and manufactured communications equipment for civilian and military first responders. Its radio systems, intercoms and interoperability equipment are built to withstand use in the most hazardous environments. The veteran-owned company, which currently has 13 employees, works with other small businesses to manufacture its products.
Trade: C-AT exports to about 18 countries. It began trading with Korea in 2008, when the company was approached by a Korean distributor. The distributor facilitated a deal for C-AT to develop a customized communications system for the Korean Coast Guard.
The system included 65 interoperability units that allowed communications between different types of devices (e.g. from a telephone to a two-way radio).
Growth: C-AT is continuing to work with its distributor in Korea to secure new business with police and military agencies. In the next few years, the company expects that the Korean government will move forward with buying and setting up emergency communications equipment. C-AT plans to pursue that business.
Bristol Compressors International
Bristol, Virginia
Industry: ManufacturingProfile: Established in 1974, Bristol Compressors International, Inc. manufactures a full line of compressors that are used in air conditioning, heat pump and refrigeration applications. The company, with 750 employees, supplies products to original equipment manufacturers and wholesale distributors including Carrier, York, Goodman and Rheem.
Exports: Bristol, which exports about half of its products, supplies compressors to customers in more than 50 countries.
It began exporting to Korea in the mid-1980s, partnering with a distributor who continues to represent the company today.
Bristol does approximately $4 to $5 million in business annually with Korea, a number that has remained steady over the past five years. Its Korean customers include original equipment manufacturers like LG Electronics and Samsung.
Growth: The KORUS FTA reduces an 8 percent tariff on Bristol’s products, making them more competitive in the Korean market. The company is placing a renewed focus on the refrigeration segment of the Korean market to take advantage of this opportunity. After conducting product field trials for a large well-known producer in Korea, Bristol secured the company as new business and significantly increased its sales in Korea.
Industry: Manufacturing
Profile: American Hardwood Industries (AHI) is one of the leading producers and suppliers of North American hardwood logs, lumber and flooring. The company, established in 1955, includes three subsidiaries: Augusta Lumber (Virginia), Blue Triangle Hardwoods (Pennsylvania) and Graham Lumber (Tennessee). With 650 employees in four states, AHI manufactures more than 110 million board feet annually.
Trade: AHI exports about 6,000 containers per year to customers around the world, amounting to about 75 percent of its business. The company began exporting to Korea more than 50 years ago. Today, AHI considers Korea a major market with customers that include importers, distributors and manufacturers. In some cases, these manufacturers export furniture and other products to the United States and other countries.
Growth: For the past six years, Korea has remained a stable market for AHI. Now, with the implementation of the KORUS FTA, AHI has increased its focus on the Korean market. By eliminating tariffs, the free trade agreement lowers the price of AHI’s products and makes them more attractive than hardwood from Africa, South America, Europe and Southeast Asia.
American Hardwood Industries
Waynesboro, Virginia
Industry: Manufacturing
Profile: W R Systems, Ltd. (WRSystems), founded in 1983, is a systems engineering product development and support services firm. The company, which currently has 335 employees, supports both government and commercial contracts through offices in Fairfax and Norfolk, Virginia.
Trade: In the past, WRSystems has worked with the Korean Navy to supply products and conduct training sessions through a U.S. government program. Now, the company is focused on growing its commercial maritime business in Korea and becoming a supplier to the shipbuilding industry. As one of the top shipbuilding countries in the world, Korea has the potential to be a major market for the company.
Growth: WRSystems is selling an emissions monitoring system to Korean shipbuilding companies through an in-country agent. The company has been named a qualified bidder for Korean shipbuilders including Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding and Marine Engineering and others. WRSystems also attended Kormarine: International Shipbuilding & Marine Equipment Exhibition in Korea in 2012, where it submitted 30 to 40 proposals in the Korean market.
W R Systems, Ltd.
Norfolk, Virginia
www.USKoreaConnect.org
Interesting Facts About Trade with Korea
Support From Around Virginia
Connections Beyond Trade
• Virginia, known for its agriculture, exported more than $4.4 million in frozen pork products to Korea in 2013, making Korea the state’s third largest market for frozen pork products.
• Virginia exported $22.1 million in ceramic wares for laboratory use to Korea in 2013.
• Korea is Virginia’s 6th largest export market by country for beauty products. In 2013, Virginia exported $16.2 million in beauty products, including perfumes, make-ups, skin care preparation, and nail-care products to Korea.
• In 2013, Virginia exported $25.8 million in yarn from man-made filaments to Korea up from $19.1 million in 2011.
Korean Markets for Virginia Companies
March 15, 2013
International trade is an integral part of Virginia’s economy, and trade with Korea has the potential to be a powerful economic asset for our businesses. Today, there are more opportunities than ever for Virginia manufacturers and service providers to increase trade with Korea’s growing economy.
KORUS FTA Opens New Markets for Virginia Companies
October 11, 2012
Today, there are more opportunities than ever for Virginia manufacturers and service providers to increase trade to Korea’s growing economy.
Industries throughout the state – including aerospace, specialty chemicals, cosmetics, education and defense, to name a few – are well positioned to take advantage.
• In 2012, it was estimated that there were approximately 68,140 Koreans and Korean Americans living in Virginia.
• There were more than 1,800 students from Korea studying at colleges and universities in Virginia during the 2012/2013 academic year.
• Four athletes from Virginia were selected to represent the United States at the 2013 Special Olympics World Winter Games held in PyeongChang, Korea.
• Annandale, Virginia, known as Washington, D.C.’s Koreatown, is home to the regional edition of The Korea Daily, a Korean-American newspaper dedicated to covering news of interest to Korean-Americans in the Annandale community.
The first Korean ever to graduate from an American college or university was Beung-Kiu Suhr, who graduated from Roanoke College in 1898.
New Production, Market Diversification Opportunities March 10, 2014
In addition to the creation of three new jobs at the facility, [Montague Farms] will now be able to sell into the highly regulated, but lucrative sprouting soybean market of South Korea and beyond.
www.USKoreaConnect.org • The Embassy of the Republic of Korea
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 2014
