KAA supports the United States’ continued leadership in the international trade legal regime and supports the Korea-US Free Trade Agreement (KORUS FTA) which further solidified the strong alliance between the US and South Korea. In its sixth year of implementation, KAA believes that on balance KORUS has been good for US exporters and businesses.
After World War II, the United States has been a beacon of international trade liberalization and was the key author of the World Trade Organization (WTO), the World Bank and the International Monetary Fund (IMF). The US was also a key driver of the Asia Pacific Economic Cooperation.
The KORUS FTA, which went into effect in 2012 and was renegotiated in 2018, increased exports from the US to South Korea in areas ranging from automobiles, pharmaceuticals, machinery, agricultural products, particularly beef, as well as protecting intellectual property rights, access to travel services, and professional and management services markets. For example, by lowering import tariffs on American alcohol, exports to Korea of Kentucky bourbon whiskey has increased significantly under the KORUS FTA. Even Hyundai cars made in Alabama are exported to Korea because they are more competitive due to KORUS.
In 2016, exported goods from America to South Korea were worth $42 billion, a level that has remained steady since 2011. Exports of services to Korea, however, have grown 30%, worth $21 million in 2016. For example, as a result of the KORUS FTA, the Korean legal services market, once closed, has now opened to US law firms. The US now has a trade surplus with Korea. For US farmers, Korea is their fifth largest largest export market. Their products represent over 20% of Korea’s imported agricultural goods.
We believe there will continue to be long-term benefits to both countries due to KORUS, which will help strengthen relations in other areas. KAA fully supports the United States’ maintaining its leadership in the international trade regime, including upholding and further expanding benefits under the KORUS FTA.
KAA believes free trade creates opportunities to build wealth, exchange ideas, protect civil and human rights, and raise standards that address health, fair labor, and climate change. Protectionist policies may have short-term benefits. But as our world becomes smaller, KAA believes that over the long run, trade liberalization will on balance benefit Americans — and all global citizens — more.