www.USKoreaConnect.org • The Embassy of the Republic of Korea Bilateral U.S.-Korea Trade Trend
KORUS FTA FACTS AND FIGURES
TRADE WORKS: A ONE-YEAR REVIEW
U.S. Exports to Korea
MARCH 15, 2012 - FEBRUARY 28, 2013
FTA Beneficiary Items FTA Non-beneficiary Items
$20.7 billion (+4.1%)
$19.1 billion (-20.1%)
Korea Exports to the U.S.
FTA Beneficiary Items FTA Non-beneficiary Items
$22.4 billion (+10.4%)
$34.6 billion (-3.6%) U.S.-Korea Total Trade Volume $96.9 billion *Year-on-year growth rates shown in parentheses
One-Year Key Trade Statistics
Source: Korea Customs Service
Source: United States Department of Commerce: Bureau of Economic Analysis (in billions of dollars)
$38.5 $45.0 $48.1 $49.9
$42.9
$55.1
$61.9
2005 2006 2007 2008 2009 2010 2011
$70
$60
$50
$40
$30
$20
$10
U.S. Exports of Services to Korea
U.S. Exports of Goods to Korea
$62.7
Billion USD
2012
Goods
In the first year under the U.S.-Korea Free Trade Agreement (KORUS FTA), Korea and the United States have shown positive growth for items that receive tariff reductions. In particular, the United States saw growth in its auto, transportation and chemical industry exports. Additionally, a large number of agricultural products including oranges and cherries saw significant increases.
Services
The U.S. services trade surplus to Korea increased 8.9 percent in 2012 compared to 2011.
• U.S. export of services to Korea (2012): $18.2 billion • Korea export of services to the U.S. (2012): $12 billion Services represent a large portion of both the U.S. and
Korean economies: 78 percent (U.S.) and 58 percent (Korea).
KORUS FTA Utilization Rate
The KORUS FTA’s utilization rate has grown steadily since its implementation. As of February 2013, 62.1 percent of U.S.
exports to Korea and 69.6 percent of Korean exports to the U.S. have benefited from the KORUS FTA.
“One year in, I am pleased to see that the U.S.- Korea trade agreement is already producing promising results for U.S. businesses and workers in America’s factories, farms and firms.”
— Demetrios Marantis, Acting U.S. Trade Representative March 15, 2013
$39.9 billion (-9.1%) $57 billion (+1.4%)
U.S.–Korea Export Beneficiary Items by Industry
Since its implementation in March 2012, we have already seen the KORUS FTA’s positive impact on goods and services that receive preferential treatment under the agreement. We call these goods and services “beneficiary items.” Under the KORUS FTA, almost 80 percent of U.S. consumer and industrial exports to Korea became duty free on March 15, 2012, and nearly 95 percent of bilateral trade in consumer and industrial products will become duty free within five years of implementation. Most remaining tariffs will be phased out within 10 years, which will amplify the positive effects on the trade of beneficiary items.
Additionally, the KORUS FTA provides unprecedented access to the Korean marketplace for American service providers. The boxes below show how the KORUS FTA has affected trade in several beneficiary industries.
AGRICULTURE AGRICULTURE
Statistics
• The KORUS FTA eliminated duties on almost two- thirds of U.S. agricultural exports to Korea, expanding opportunities for many farm products.
• In 2012, the United States exported $5.9 billion in agricultural and food products to Korea, the United States’ 5th largest export destination for farm products.
• In 2012, Korea became the largest export market for U.S.
oranges, accounting for nearly one-third of total U.S.
orange exports by value.
Beneficiaries
• Soybeans
Both out-of-quota tariff (487%) and in-quota tariff (5%) were eliminated immediately for soybean oil and oil cake (for all soybeans, 130% increase*)
• Oranges (fresh)
50% tariff (Sept.-Feb.) eliminated immediately (out-of-quota remains at 50%); 30% tariff (Mar.-Aug.) being eliminated over 7 years (19.5% increase*)
• Almonds
8% tariff eliminated immediately (68.9% increase*)
• Cherries (fresh)
24% tariff eliminated immediately (87.1% increase*)
• Potatoes (prepared or frozen)
18% tariff eliminated immediately (34.4% increase*)
• Cheese (e.g., mozzarella, cream cheese)
36% tariff being eliminated over 15 years (0% tariff applied for quantity less than 7,000t) (131.1% increase*)
• Lemons
30% tariff eliminated immediately (53.1% increase*)
• Pork bellies (e.g., bacon)
30% tariff being eliminated over 3 years (209.8% increase*)
Statistics
• U.S. companies are well-positioned to take advantage of improved market access in Korea, making their chemical products more cost competitive and allowing firms to reinvest in technology and product improvements.
• In 2012, the United States exported $6.9 billion in chemicals to Korea.
• Korea is the U.S. chemical industry’s 7th largest export market.
Beneficiaries
• Hexamethylenediamine and its salts
6.5% tariff eliminated immediately (64.2% increase*)
• Diols
5.5% tariff eliminated immediately or being eliminated over 10 years (92.5% increase*)
• Mono alkyl ethers of ethylene glycol (e.g., for paints) 5.5% tariff eliminated immediately (33% increase*)
CHEMICALS CHEMICALS
AUTOS AUTOS
Statistics
• Under the KORUS FTA, Korea continues to open its automotive market to imports.
• According to the U.S. Department of Commerce, U.S.
exports of passenger vehicles to Korea increased 48 percent from 2011 to 2012, and 283 percent from 2009 to 2012.
Beneficiaries
• Passenger motor vehicles
8% tariff being eliminated by 2016 (49.8% increase*)
• Gear boxes for motor vehicles
8% tariff eliminated immediately (227.9% increase*)
• Safety seat belts for motor vehicles
8% tariff eliminated immediately (74.6% increase*)
www.USKoreaConnect.org • The Embassy of the Republic of Korea
Left photo: U.S. cherry exports increased by more than 87% in the first year under the KORUS FTA.
Right photo: The Elantra is one of two Hyundai models produced by Hyundai Motors Manufacturing Alabama in Montgomery, AL.
For all beneficiary items listed below, tariff rates represent those applied before the KORUS FTA entered into force. Note that the elimination schedule for each item takes effect with the agreement.
* Increases represent year-on-year growth between March 2011-February 2012 and March 2012-February 2013.
PLASTICS PLASTICS
Statistics
• The plastics industry, one of the U.S. economy’s largest and fastest growing industries, will benefit under the KORUS FTA, which eliminates nearly all tariffs on U.S. plastic products going into Korea within five years.
• In 2012, the United States exported $218.5 million in plastics to Korea.
• Korea is the 10th largest market for the U.S. plastics industry.
Beneficiaries
• Cellulose acetates (nonplasticized)
5% tariff being eliminated over 3 years (38.8% increase*)
• Polysulfides and polysulfones
6.5% tariff eliminated immediately (49.8% increase*)
• Amino-resins
6.5% tariff eliminated immediately (18.7% increase*)
• Plastic carboys, bottles and flasks
6.5% tariff eliminated immediately (93.2% increase*)
• Plastic doors, windows and their frames
6.5% tariff eliminated immediately (92.8% increase*)
MANUFACTURING & MACHINERY MANUFACTURING & MACHINERY
Statistics
• The KORUS FTA gives manufacturing and machinery companies across the United States a better chance to compete in Korea’s dynamic marketplace by reducing tariffs and making it easier to export goods.
• In 2012, the United States exported $14.2 billion in machinery and electrical machinery to Korea.
Beneficiaries
• Parts for turbojets and turbopropellers
3% or 8% tariff eliminated immediately or being eliminated over 3 years (63.1% increase*)
• Electric generators
8% tariff eliminated immediately (27.9% increase*)
• Air or gas pumps, compressors and fans
8% tariff eliminated immediately or being eliminated over 3 years (72.3% increase*)
• Navigational instruments and appliances 8% tariff eliminated immediately (85.3% increase*)
• Pumps for liquids
8% tariff eliminated immediately or being eliminated over 3 years (34.3% increase*)
www.USKoreaConnect.org • The Embassy of the Republic of Korea
** All investment figures are on a “notification basis as reported.”
SERVICES SERVICES
Facts
• U.S. service providers in sectors such as telecommunications, e-commerce and international express delivery are benefitting from the agreement.
• In 2012, there was $30.2 billion in two-way trade of services between Korea and the United States.
• The provisions of the KORUS FTA grant U.S. law firms access to practice in Korea. As of May 2013 more than 10 U.S. law firms had opened offices in Korea with many others planning to follow suit.
INVESTMENT**
INVESTMENT**
Statistics
• U.S. foreign direct investment (FDI) in Korea was $3.7 billion (317 instances) in 2012.
• Korea’s FDI in the United States was $6.9 billion (1,156 instances) in 2012.
INTELLECTUAL PROPERTY INTELLECTUAL PROPERTY
Facts
• For copyrighted works, the KORUS FTA extends Korean copyright protections from life of the author plus 50 years to life of the author plus 70 years, and protects temporary copies of copyrighted work on the internet.
• For patents, the KORUS FTA provides an extension of patent terms for undue delays in granting the original patent.
• For trademarks, the KORUS FTA deters intellectual property rights violators from shipping counterfeit products through Korean ports and free trade zones with new customs enforcement rules.
Billion USD
U.S.-Korea Crossborder Investment (cumulative)
Korean Investment to the U.S.
U.S. Investment to Korea
2007 2008 2009 2010 2011 2012
$64.3 billion
$49.8 billion
www.USKoreaConnect.org • The Embassy of the Republic of Korea U.S. Korea Connect’s LinkedIn, Facebook and Twitter groups help businesses
connect and learn more about taking advantage of the KORUS FTA. As a member of our online communities, you’ll have exclusive access to data, research and events on trade between the United States and Korea.
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Please visit our website at www.USKoreaConnect.org for information on how to contact the Embassy of the Republic of Korea.
Get Connected Contact Us
Despite the challenging global economic climate in 2012, Korea’s trade continued to grow with countries with which it has free trade agreements (FTAs). Korea’s FTA partners saw a 1.1 percent increase in trade volume between 2011 and 2012, while the trade volume with non-FTA countries decreased by 2.2 percent over the same period. As of 2012, Korea had FTAs in effect with the United States, the Association of Southeast Asian Nations (ASEAN), the European Union, Chile, the European Free Trade Association (EFTA), India, Peru and Singapore. Through its numerous FTAs, Korea has created a stable and transparent trading and investment environment connecting its trading partners around the globe.
The chart below provides additional detail on Korea’s trade with FTA and non-FTA countries.
FTA Economies vs. Non-FTA Economies
All figures in U.S. dollars. Information based on data from the U.S. Department of Agriculture, U.S. Census Bureau, U.S. Department of Commerce: Bureau of Economic Analysis, Ministry of Knowledge Economy of Korea, Export-Import Bank of Korea, the CIA World Factbook, Society of the Plastics Industry, Korea Customs Service, the United States Trade Representative and the United States International Trade Commission.
Last updated: June 2013.
Source: Korea Customs Service (in millions of dollars)
Small and Medium Enterprises
Small and medium enterprises from the United States and Korea, representing a variety of industries, are benefitting from the KORUS FTA. U.S. Korea Connect continues to gather success stories from small and medium sized companies that are taking advantage of the KORUS FTA and expanding their businesses. These success stories are available on the USKoreaConnect.org website and in Trade Works, our recently-released compendium of KORUS FTA business success stories.
Worldwide FTA Countries Non-FTA Countries
2011 2012 % Change 2011 2012 % Change 2011 2012 % Change
Export 555,214 548,309 -1.2% 201,957 204,502 1.3% 353,257 343,808 -2.7%
Import 524,413 519,479 -0.9% 164,993 166,626 1.0% 359,420 352,853 -1.8%
Trade Volume 1,079,627 1,067,789 -1.1% 366,950 371,128 1.1% 712,677 696,661 -2.2%
