Washington, D.C. - Congressman Kevin Brady congratulated U.S. Trade Representative Susan Schwab, Deputy U.S. Trade Representative Karan Bhatia, Assistant USTR Wendy Cutler and the numerous U.S. trade negotiators and attorneys who worked to complete a trade agreement with South Korea that offers significant economic and strategic benefits for the United States.
The legal text of the free trade agreement (FTA) was formally released last night, and the U.S. Congress and South Korea’s legislature now must approve the accord before it can go into effect.
“Our economy stands to benefit tremendously with this agreement – from agriculture to manufacturing to services,” said Congressman Brady. “Texas business owners, farmers and ranchers will be able to sell more of their products in Korea, which is the 10th largest market in the world.
“It also boosts our competitiveness in the thriving Asian market, which is critical if the United States is to remain as the world’s leading economy, and Texas as the nation’s leading exporter. We can’t afford to sit on the sidelines.
“Negotiations were tough, and I commend Ambassadors Schwab and Bhatia and Ms. Cutler for getting us across the finish line. The Koreans should have opened up on rice, and we still some unresolved issues on beef, which I expect to be addressed soon, but all in all, this is a solid, landmark agreement.”
Background:
Two-way trade between the United States and Korea is already strong, valued at $78 billion last year alone. By eliminating tariffs and other trade barriers and strengthening protections for U.S. companies, the U.S.-Korea Free Trade Agreement will expand trade and investment even more.
For U.S. farmers and ranchers, tariffs on more than $1.5 billion worth of U.S. agriculture exports to Korea will be removed immediately, with most of the remaining tariffs and quotas phased out over 10 years.
And nearly 95 percent of trade in manufactured goods will become duty-free within three years, with most of the remaining tariffs eliminated within 10 years.
Texas service providers will also enjoy greater access to and new opportunities in the Korea market as well, including in the telecommunications, life insurance, financial services, motion pictures and television, and express delivery sectors. The U.S. is already the world’s top seller of services, and Korea is the sixth largest purchaser.
U.S. investors will have better protections thanks to the agreement, which also includes strong protections for intellectual property, such as trademarks, copyrights and patents.
The trade talks delivered on sensitive sectors as well.
For U.S. carmakers that have long been shut out of the Korean market, Korea agreed to eliminate its eight percent auto tariff and the discriminatory aspects of its system for taxing cars based on “engine displacement.” Korea also agreed to address current emissions and automotive safety standards to ensure that they do not keep U.S. automotive manufacturers from accessing the Korean market, and to include a unique dispute settlement mechanism that will serve as a powerful deterrent against any violations of autos-related commitments in the FTA.
Negotiators also locked-in tariff elimination for U.S. beef exports to Korea, which will greatly benefit our ranchers over the long-term. The immediate issue, however, is getting the Koreans to accept U.S. beef after it was banned three years ago because of BSE. A ruling earlier this week by an international food standards body found U.S. beef to be safe, which helps paves the way for Korean action. Before the ban, Korea was the third largest export market for U.S. beef, valued at $800 million a year.
Congressman Kevin Brady is a Member of the House Ways and Means Committee and Trade Sub-committee, which overseas U.S. trade policy, and the Joint Economic Committee, which plays a significant role in issues affecting the U.S. economy. He is recognized as one of the top leaders on trade issues in Congress, having successfully led the fight to approve the U.S.-Central American Free Trade Agreement two years ago.
