Economics & Trade Relations
Washington File
12 October 2001
Text: Free Trade Agreement Would Boost U.S.-Korea Trade
(October 11 USITC news release) (600)
A U.S.-Korea free trade agreement (FTA) would increase the bilateral
trade between the two countries, according to a study conducted by the
U.S. International Trade Commission (ITC).
In an October 11 news release, the ITC said its report showed the
benefits of increased trade would be in agriculture, textiles, and
apparel.
The ITC wrote "U.S.-Korea FTA: The Economic Impact of Establishing a
Free Trade Agreement (FTA) Between the United States and the Republic
of Korea" in response to a tasking from the Senate Finance Committee.
Following is the text of the October 11 ITC news release:
(begin text)
October 11, 2001
News Release
U.S.-KOREA FTA WOULD INCREASE BILATERAL TRADE, REPORTS ITC
A U.S.-Korea free trade agreement (FTA) would result in increased
bilateral trade, particularly in agriculture, textiles, apparel, and
leather goods, reports the U.S. International Trade Commission (ITC)
in its publication U.S.-Korea FTA: The Economic Impact of Establishing
a Free Trade Agreement (FTA) Between the United States and the
Republic of Korea.
The ITC, an independent, nonpartisan, fact-finding federal agency,
recently concluded the investigation for the U.S. Senate Committee on
Finance. The report examines the economic impact of a U.S.-Korea FTA.
Highlights of the report follow:
In 2000, U.S.-Korea bilateral trade totaled $69 billion. Korea was the
United States' eighth largest export market and sixth largest import
source, while the United States was Korea's largest export market and
second largest import source.
Each country faces relatively high tariffs on goods in which it has a
comparative advantage relative to the other. The largest gains in U.S.
exports to Korea are expected in agricultural products (rice, dairy,
meat products, and fruits and vegetables). The largest increase in
U.S. imports from Korea are expected in textiles, apparel and leather
goods. The trade flows in each of these sectors are expected to at
least double.
A U.S.-Korea FTA would likely increase U.S. exports to Korea by 54
percent ($19 billion) and U.S. imports from Korea by 21 percent ($10
billion).
U.S. industry has identified the Korean regulatory regime as the
greatest barrier to U.S. exports in Korea, and Korean product and
safety standards, pharmaceutical testing requirements, and labeling
negatively affect foreign firms' ability to sell goods and services in
Korea.
The foregoing information is from U.S.-Korea FTA: The Economic Impact
of Establishing a Free Trade Agreement (FTA) Between the United States
and the Republic of Korea (Investigation No. 332-425, USITC
Publication 3452, September 2001). The report will be available on the
USITC's Internet site at www.usitc.gov. A printed copy of the report
may be requested by calling 202-205-1809 or by writing the Office of
the Secretary, U.S. International Trade Commission, 500 E Street, SW,
Washington, DC 20436. Requests may also be made by fax to
202-205-2104.
ITC general fact-finding investigations, such as this one, cover
matters related to tariffs or trade and are generally conducted at the
request of the U.S. Trade Representative, the Senate Committee on
Finance, or the House Committee on Ways and Means. The resulting
reports convey the Commission's objective findings and independent
analyses on the subjects investigated. The Commission makes no
recommendations on policy or other matters in its general fact-finding
reports. Upon completion of each investigation, the ITC submits its
findings and analyses to the requestor. General fact-finding
investigation reports are subsequently released to the public, unless
they are classified by the requestor for national security reasons.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)