U.S. Job Growth Among Benefits Of South Korean Trade Alliance
Guest column submitted by U.S. Senator Mike Crapo
In recent years, the U.S. has slipped from being the top exporter to South Korea to third place. Tariffs on U.S. products entering this market do not help. South Korea's agricultural tariffs average almost 49 percent. Paying nearly $1 billion annually, U.S. exporters to South Korea face average tariffs on industrial goods of more than double the average tariffs South Korea faces exporting to the U.S. The wound is entirely self-inflicted by the needless delay in passingan agreement to immediately reduce the cost of accessing this important market and increase opportunities for U.S. job creators. The U.S.-South Korea Free Trade Agreement (KORUS FTA) would decrease trade barriers, boost our exports and strengthen the economic relationship between our two nations.
Through the KORUS FTA, nearly 95 percent of bilateral trade in consumer and industrial products would become duty-free within three years, and most remaining tariffs would be eliminated within 10 years. The FTA would immediately eliminate or phase-out tariffs and quotas on a broad range of agricultural products, with almost two-thirds of South Korea's agriculture imports from the U.S. becoming duty-free. The U.S. International Trade Commission (USITC) estimates the annual increase in U.S. agricultural exports would be from $1.9-3.8 billion under the fully-implemented FTA.
Idaho exports nearly $300 million in goods to South Korea, our fifth-largest export market. With four of Idaho's top five export markets in Asia, we can no longer allow our trade competitors in Europe and Australia to displace us in South Korea and elsewhere in Asia. The KORUS FTA would open the door wider for sales of Idaho and U.S. products in this important and growing region.
Overall, the USITC estimated that the U.S. Gross Domestic Product (GDP) would increase by approximately $10 billion if the KORUS FTA is implemented. In testimony for the Senate Finance Committee, on which I serve, Deputy U.S. Trade Representative Demetrios Marantis indicated the agreement will strengthen our trade and investment ties to South Korea's $1 trillion economy and create substantial export opportunities. "The tariff reductions on goods exports alone will lead to significant increases in U.S. exports to Korea that will support over 70,000 additional American jobs." Others project an even larger boost to our economy. According to University of Michigan analyses, U.S. GDP would increase by $25.12 billion.
Additionally, the agreement provides an opportunity to deepen ties with a vital regional security partner. Our two nations have been allies for more than 60 years. Thousands of American military personnel serve on the Korean peninsula to enforce regional stability, and South Korea has assisted with multinational efforts in Iraq and Afghanistan. The U.S. and South Korea have also worked closely in isolating a dangerous North Korea.
This FTA was signed more than four years ago, and President Obama needlessly delayed submitting implementation legislation to Congress while other countries negotiated and ratified their own accords with South Korea. With the U.S. unemployment rate persistently above 9 percent, this is an economic growth opportunity we cannot let slip away.
This trade agreement would enhance our global competitiveness and increase ties with an important East Asian ally. Enactment of the KORUS FTA will be a much-needed step in the right direction, and it should be implemented without further delay.
# # #
Word Count: 536