The trade agreement affects approximately 362 million consumers in the United States and the Republic of Korea. [Citation needed] The treaty provisions eliminate 95% of each country`s tariffs on goods within five years and create new protections for multinational financial service providers and other businesses. [4] For the United States, the treaty was the first free trade agreement (FTA) with a major Asian economy and the largest trade agreement since the North American Free Trade Agreement (NAFTA) in 1993. For South Korea, the KORUS free trade agreement is the second after the free trade agreement signed with the European Union[10] and dwarfs the other free trade agreements signed with Chile, Singapore, the European Free Trade Association and the Association of Southeast Asian Nations (ASEAN). [11] KORUS 2.0 is largely just an optimization of the original KORUS, but includes some notable changes. Some issues were treated as amendments to the original KORUS, while others that were not covered in the original were negotiated as ancillary agreements obtained by correspondence between the parties. The changes demanded by the U.S. included restrictions on steel exports, a larger quota for U.S. cars exported to Korea that meet U.S. emission and safety standards instead of Korea`s idiosyncratic rules, a 25% extension of the duration of U.S.
tariffs on imported pickup trucks, changes to Korean rules on drug prices and new procedures for Korean customs inspections. Several Korean claims have also led to changes in investor-state dispute settlement procedures and the trade defence mechanism, as well as in the standards of origin of certain textile products. As in the United States, the free trade agreement in Korea is proving to be a very controversial issue. The opposition`s arguments tend to focus on the perceived disparities in the agreement as well as public opinion. Proponents tend to focus on economic forecasts. During the 2016 U.S. presidential campaign, Republican candidate Donald Trump called the U.S.-Korea free trade agreement a “job-destroying trade deal.” [32] [33] Shortly thereafter, Korea completed its domestic policy procedure for the implementation of the amended KORUS, and on the 7th. In December 2018, the National Assembly ratified the agreement by 180 votes to 5, with 19 abstentions.17 Although the Koreans have indicated that they will demand an exemption from possible Trump administration Article 232 tariffs on all automobiles in exchange for their approval of the new KORUS, the legislation has been finalized without addressing this issue.18 In the meantime, no congressional vote was required in the United States, because the scope of the revisions was limited and no changes were made to U.S. laws. The renegotiation of KORUS is a useful example of Trump`s trade deal in practice.
As we`ll show below, the renegotiation brought only minor changes to the deal and could be understood as meaning that the reality of Trump`s trade policy doesn`t always coincide with the rhetoric. However, the government`s concerns about trade with Korea have always been less pronounced than its concerns about trade with other trading partners, so the conclusion of the KORUS talks with only minor changes could simply reflect the government`s focus on other areas of trade policy and not an indication of its overall approach to trade policy. The United States has negotiated a comprehensive free trade agreement with South Korea. The U.S.-Korea Free Trade Agreement will eliminate tariffs and other barriers to trade in goods and services, promote economic growth, and strengthen U.S.-Korea economic ties. Once implemented, nearly 95% of bilateral trade in consumer and industrial products will be duty-free within three years, including many major U.S. exports such as industrial and consumer electronics machinery and parts; auto parts; equipment for the production of electricity; the majority of chemicals, medical and scientific equipment; motorcycles; and certain wood products. Most of the remaining tariffs will be abolished within 10 years. The original KORUS is the result of bilateral consultations that began in late 2004, although the idea of a trade agreement between the two countries had already circulated in the 1980s.
An agreement was finalized in April 2007, revised next month to meet Democratic demands in Congress, and on April 30, 2007. Signed by the parties in June 2007.3 The important features of the agreement were a phase in the abolition of most tariffs on bilateral trade, with automotive and agriculture being the most notable areas of liberalization; a reduction in the burden of various Korean tax and regulatory policies; and the opening of certain Korean services markets. [4] In the second half of 2008, U.S. officials expressed confidence that the trade deal would be approved after the November 4 elections. [20] In the 2008 U.S. presidential election, Senator John McCain of the Republican Party and Senator Barack Obama of the Democratic Party both expressed their commitment to a U.S.-Korean alliance, but the Democratic Party expressed concern about globalization and renewed its doubts about trade liberalization, which, according to him, could endanger Korea and the United States. .
