ManuFACTS: U.S.

-Korea Free Trade Agreement
A Win-Win for Korean Consumers and U.S. Manufacturers
• Korea offers U.S. manufacturers a growing opportunity for exports within a dynamic and expanding market. Korea is our seventh-largest trading partner and is a crucial export destination for U.S. manufacturing. Korea is one of the fastest-growing industrial economies in Asia, and its GDP has grown by 67 percent since 2000, according to the International Monetary Fund (IMF).
• Small and medium-sized manufacturers will strongly benefit from the U.S.-Korea agreement: nearly 19,000 small and medium-sized companies export goods to Korea, representing 90 percent of total U.S. exporters. • Manufactured goods are the vast majority of U.S. exports to Korea. In 2010, the U.S. exported $31.6 billion worth of manufactured goods to Korea, and Korea was our fastest-growing export destination in the world, with a 37 percent increase over 2009 exports. Manufactured goods make up over 75 percent of total U.S. merchandise exports to Korea. • The U.S.-Korea free trade agreement (FTA) will result in an $8 billion increase in exports of U.S. manufactured goods to Korea, according to the U.S. International Trade Commission (USITC). • These exports include $6.5 billion in machinery, $6 billion in chemicals, $6 billion in computer and electronics products, $3.8 billion in transportation products and $2.3 billion in processed food products.

How Congress Can Help
• This trade agreement is a deficit-neutral, job-creating economic stimulus package. This preferential trade agreement will increase U.S. manufacturing exports to Korea. The Obama Administration needs to send this trade agreement to Congress for approval as quickly as possible, and Congress should act immediately to pass the implementing legislation.

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Bottom Line
The U.S.-Korea trade agreement offers real advantages to the manufacturing sector: • U.S. manufactured goods face an effective average tariff of 9 percent in Korea. This agreement will lower these tariffs to zero, in most cases immediately. The agreement also has state-of-the-art language protecting intellectual property rights (IPR), government procurement and U.S. investments in Korea.

• Failure to pass the agreement could cause the U.S. to lose
our strong presence as a market leader— the European Union’s trade agreement takes effect on July 1, 2011, and the EU is already a larger manufacturing exporter to Korea than the United States. We will lose our market share in crucial export sectors in Korea without the preferential terms of this agreement. To keep our exports strong, we need the U.S.Korea trade agreement.

More Information
Web: www.nam.org/trade E-mail: trade@nam.org April 2011

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