A new KORUS
Earlier this year the U.S. and Korea agreed to amend and modify The U.S.-Korea Free Trade Agreement. The U.S.-Korea Free Trade Agreement originally entered into force on March 15, 2012. In 2016, Korea was our 6th largest goods trading partner with $112.2 billion in total (two way). Korea was the United States’ 7th largest goods export market in 2016 with top markets for machinery, electrical machinery, aircraft, optical and medical supplies, vehicles, and agriculture.
According to Sandler, Travis, and Rosenberg, the United States Trade Representative states that “Korea will now open for public comment the provisional Korean translations of the outcomes. Once this is complete and the translations are certified by both governments, the documents may be finalized for signature, which will be followed by further procedures in both countries as needed to bring the outcomes into force. In the U.S., any necessary modifications to the tariff schedule will undergo consultation and layover procedures that include a 60-day consultation period with Congress.”
Sandler, Travis, and Rosenberg summed up the document well. The international trade law firm states that changes to KORUS include the following:
– The phase-out of the 25 percent U.S. tariff on Korean trucks will be extended from 2021 to 2041.
– The number of U.S. automobile exports that can meet U.S. safety standards (in lieu of Korean standards) and enter the Korean market without further modification will be doubled to 50,000 cars per manufacturer per year.
– U.S. gasoline engine vehicle exports may show compliance with Korea’s emission standards using the same tests conducted to show compliance with U.S. regulations.
– Korea will recognize U.S. standards for auto parts necessary to service U.S. vehicles and reduce labeling burdens for parts.
– Korea has agreed on principles for conducting verification of origin of exports under KORUS.
– Within 2018 Korea will amend its Premium Pricing Policy for Global Innovative Drugs to make it consistent with commitments under KORUS to ensure non-discriminatory and fair treatment for U.S. pharmaceutical exports.
– A memorandum of understanding is being finalized on robust provisions to prohibit competitive currency devaluation and exchange rate manipulation.
– Korean exports of steel products to the U.S. will be subject to a product-specific quota equivalent to 70 percent of the average annual import volume of such products during the period 2015 to 2017.
View Document (pdf)