Opportunities for Alaska

O p p o r t u n i t i e s f o r A l a s k a

www.USKoreaConnect.org • The Embassy of the Republic of Korea The implementation of the U.S.-Korea Free Trade Agreement

(KORUS FTA) has created exciting new opportunities for Alaska businesses and communities. Removing tariffs on goods and restrictions on services, the strengthened U.S.- Korea economic partnership is spurring business growth, creating jobs, opening new markets and providing access to a larger pool of consumers.

Alaska, which is known as “The Last Frontier,” is home to a wide range of businesses, from agriculture to aerospace. 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 Alaska and Korea. Below are a few of the products that benefit from the KORUS FTA.

Trade Growth Jobs

• Alaska exported $683.3 million in goods to Korea in 2013.

• Alaska imported $438.7 million in goods from Korea in 2013.

• The KORUS FTA more closely connects Alaska 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 Alaska.

Alaska’s Top Trade Items with Korea (2013) Exports

Fish and marine products

$362.9 million Metal ores

$277.8 million Timber and logs

$28.8 million Coal and petroleum gases

$8.6 million

Aerospace products and parts

$2.2 million Seafood products

$2.1 million Navigational and measuring instruments

$263,000 Alaska’s Top Beneficiary Trade Items

Exports Metal Products

• Lead ores and concentrates 1% tariff eliminated immediately Food/Agriculture

• Frozen salmon

10% tariff eliminated over 3 years

• Other frozen fish (i.e. Alaska pollock, surim)

10% tariff eliminated over 3 years

• Flour meals and pellets of fish (inedible)

5% tariff eliminated over 3 or 5 years

Other Industries

• Untreated coniferous wood 2% tariff eliminated immediately

Imports Chemicals

• Oil and petroleum products 52.5 cents/bbl eliminated

immediately Food/Agriculture

• Food preparations

10% tariff eliminated over 5 years Transportation

• Inflatable yachts and vessels 2.4% tariff eliminated immediately Other Industries

• Sacks and bags for packaging 8.4% tariff eliminated immediately

• Floorcloths, dishcloths and dusters

4.1% or 5.3% tariff eliminated immediately

Imports Coal and petroleum products

$317 million

Aerospace products and parts

$10.9 million

Converted paper prod- ucts $8 million

Iron and steel

$7.7 million Food products

$4.8 million

Engines, turbines and power transmission equipment

$4.5 million

Cement and concrete products

$4.3 million

www.USKoreaConnect.org

Businesses around Alaska are taking advantage of opportunities from the KORUS FTA and the strong relationship between the United States and Korea.

Watch Us Grow Together

Alaska Glacier Products

Anchorage, Alaska

Profile: Alaska Glacier Products exports freshly bottled Alaskan spring water to countries around the world. The company, which was founded in 2010, supports 15 highly-skilled employees at its facility on Eklutna Glacier Lake where they bottle 35 million gallons of water every day. Nestled high in the peaks of Alaska’s Chugach Mountains, the Eklutna Glacier supplies mineral-rich water to the lake, which is 1,000 feet above sea level. The production facility also sits on several deep wells able to draw cold all-natural high quality water from several below-ground Eklutna aquifers.

Investing in Newport: Alaska Glacier Products sells approximately 80 percent of its total production in international markets. The company attributes this strong global demand to customers in Korea and around the world who appreciate high- quality spring water. The clean, fresh taste of Alaskan spring water makes it a popular product in Korea and around the world. One of Alaska Glacier Products’ first customers was a Korean distributor. That positive relationship led Alaska Glacier Products to identify Korea as one of its primary targets for future growth.

Growth: The KORUS FTA eliminates an 8 percent tariff on bottled water during the first five to 10 years of implementation, making Alaska Glacier Products’ spring water more competitive in Korea. With a high volume of trade between the U.S. and Korea, Alaska Glacier Products is able to take advantage of shipping opportunities that are not available in other markets. The company expects that its rapidly growing production capacity and marketing flexibility will attract a long-term partner in the Korean market. To fill growing demand for its water, Alaska Glacier Products plans to scale its output to 100-150 shipping containers of fresh Alaskan spring water every month.

Kodiak Fishmeal Company

Kodiak, Alaska

Profile: Founded in 1992, Kodiak Fishmeal Company sells custom blends of fishmeal and fish oils, which are essential ingredients in pet foods, agricultural feeds and fertilizers. Kodiak employs 20 people at its manufacturing facility in Kodiak, Alaska.

Located in the heart of a commercial fishing zone, Kodiak Island is home to an active fishing industry and ample salmon populations.

Kodiak Fishmeal Company converts the trimmings from fish processing into a valuable commodity for farmers and pet food producers around the world.

Exports: Kodiak Fishmeal Company annually exports 2,000 to 3,000 metric tons of its products to customers in Korea, Canada, Japan, Taiwan, Malaysia and Indonesia. The company established trade relationships in Korea more than 20 years ago when Korean companies first discovered Kodiak’s high quality products. Korean farmers who buy from Kodiak Fishmeal Co. raise various kinds of seafood including eels, Seoul flounder, pen-raised fish and other types of aquaculture.

Growth: The KORUS FTA eliminated Korea’s 20 percent import tariff on U.S. fishmeal over three years. While Kodiak Fishmeal Company experienced small declines in demand from Korea in recent years, the company has seen sales trending higher this year, which can be attributed to the lower tariffs for importers under the KORUS FTA.

Access to the Korean market through the KORUS FTA also gives Kodiak Fishmeal Company a competitive advantage, especially in years when demand from other markets becomes volatile and competitors have to race to find new buyers.

www.USKoreaConnect.org

Interesting Facts About Trade with Korea

Support From Around Alaska

Connections Beyond Trade

• Alaska exported $327.8 million in fish to Korea in 2013, approximately

$50,000 for every mile of its 6,640 mile coastline.

• Though historically known for its abundant gold mines, Alaska exported

$138.9 million in zinc ores and concentrates to Korea in 2013.

• Home to the largest national forest in the United States, Alaska exported more than $28.8 million in wood to Korea in 2013.

• Alaska exported $33.7 million in flour meals and meat offal to Korea in 2013, an increase of 650 percent over its 2011 total of $4.5 million.

• In 2012, more than 3,400 Koreans and Korean Americans were living in Alaska.

• There were approximately 60 students from Korea studying at universities in Alaska during the 2012/2013 academic year.

• June 20th is Korea-Alaska Friendship Day, a holiday honoring the 2008 opening of the Korea Consular Office in Anchorage.

• Anchorage is home to Radio Korea Alaska, a radio station that broadcasts news in

the Korean language to the Korean American community in Alaska’s capital city.

Commerce Commissioner Susan Bell to Address U.S.- Korea Investment and Trade Cooperation Forum in D.C.

December 6, 2012

Korea has been an important trading partner with Alaska for more than four decades, and accounted for $644 million of the state’s exports in 2011, making Korea the third largest export market.

Korea Connection: Update on Export Procedures

April 4, 2012

“Korea is one of Alaska’s most important trading partners and is currently ranked

#3 among all overseas markets.”

Declaration by Alaska Governor Sean Parnell

June 20, 2014

The Republic of Korea has been an important trading partner of Alaska’s for four decades, accounting for $683 million of our state’s exports in 2013.

www.USKoreaConnect.org • The Embassy of the Republic of Korea 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 the 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.

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.

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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 KORUS FTA makes U.S. businesses more competitive in Korea and provides a model for future trade agreements.

About Korea

• Population: 51 million (May 2013)

• GDP per capita (nominal) : $23,838 (2013)*

• GDP (PPP-based): $1.67 trillion, ranking Korea the world’s 12th largest economy (2013)*

• GDP (nominal): $1.2 trillion (2013)*

• Real GDP growth rate: 2.84% (2013)*

• In 2012, 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 $41.6 billion worth of goods to Korea and imported $62.2 billion worth of goods in 2013.

• Korea is the United States’ 6th largest trading partner, while the United States is Korea’s 3rd largest.

INVESTMENT**

• U.S. foreign direct investment (FDI) in Korea was

$3.5 billion in 2013.

• Korea’s FDI in the United States was $5.4 billion in 2013.

**All investment figures are on a notification basis as reported.

Benefits of the KORUS FTA

ECONOMIC GROWTH: By expanding trade ties with Korea’s dynamic, growing, high-income economy, the agreement will increase U.S. economic growth by up to $11.9 billion at no cost to U.S. taxpayers.

JOBS: The implementation of the KORUS FTA supports the creation of jobs in the United States.

SHARED VALUES: Korea is a vibrant democracy, a staunch ally of the United States and a major commercial center in East Asia that provides America with a strong partner in an increasingly important region.

All figures in U.S. dollars. Information based on data from the U.S. International Trade Commission, U.S. Department 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, and the International Monetary Fund.

Last updated: June 2014.