2016年-PIIE彼得森国际经济研究所_The_Korea_12页_469kb

The Korea-US Free Trade Agreement: A Summary Assessment

Core Content

The Korea-US Free Trade Agreement (KORUS FTA) is a comprehensive trade pact aimed at enhancing bilateral economic relations and reinforcing the political and security partnership between the two countries. The agreement is not a perfect solution but provides substantial benefits that make both nations better off than they would be without it. The FTA covers a significant portion of bilateral trade, with the exception of the Korean rice sector, and includes provisions to reduce tariffs and improve regulatory transparency.

Main Viewpoints

• Economic Benefits: The KORUS FTA is expected to generate welfare gains for both the United States and South Korea, although the extent of these benefits depends on how governments and firms respond to the new competitive environment.
• Trade Imbalance: The agreement does not address the underlying trade imbalance, which is a major concern for the US auto industry and labor unions.
• Auto Sector: The FTA removes most tariffs on automotive products and includes regulatory reforms that should improve market access for US automakers, although the impact is limited due to existing trade barriers and competition from Japanese and European cars.
• Agriculture: The FTA covers most agricultural products, with the exception of rice, and includes phased tariff reductions. It is expected to benefit US agricultural exports, especially in categories like meat, dairy, and certain fruits and nuts.
• Political Considerations: The FTA serves as a strategic tool for both countries in the context of regional economic integration and security in the Korean Peninsula.

Key Information

Bilateral Trade Overview

• In 2006, US-Korea bilateral merchandise trade exceeded $75 billion, with US exports at $30.8 billion and imports from Korea at $44.7 billion.
• Auto trade alone accounted for $11.6 billion, or about 15% of total bilateral trade, highlighting its significance.
• Korean auto exports to the US were about 150 times higher than US auto exports to Korea, raising concerns about market discrimination.

Auto Trade Provisions

• Tariff Reductions: Most tariffs on cars will be eliminated within three years, with the 25% US light truck tariff phased out over nine years.
• Regulatory Reforms: The FTA includes provisions for greater transparency and access to the regulatory process, along with a dispute resolution mechanism.
• Investment Protections: The agreement provides protections for US investors in the Korean auto sector, reducing the risk of performance requirements that may restrict technology transfer.
• Industry Concerns: US auto unions and companies like Chrysler and Ford oppose the FTA due to fears of job losses and reduced market share. However, the FTA is seen as beneficial for both sides in the long term.

Agricultural Trade Provisions

• Rice Exemption: The FTA excludes rice from tariff liberalization, which is a major point of contention for US labor unions.
• Beef Market Access: The FTA phases out Korean tariffs on beef over 15 years, but the import ban due to BSE concerns remains unresolved, delaying ratification in the US Congress.
• Other Agricultural Products: The FTA includes tariff reductions for a wide range of agricultural goods, including wheat, corn, soybeans, wine, frozen orange juice, and various vegetables and nuts.
• Impact on Korean Farmers: The agreement is expected to negatively affect certain segments of the Korean agricultural sector, particularly beef, pork, mandarin oranges, and beans, prompting the government to offer adjustment assistance.

Regional and Political Implications

• The FTA is part of a broader effort to enhance economic integration in the Asia-Pacific region, especially in response to China's growing economic influence.
• It serves as a tool for the United States to strengthen its economic and political ties with South Korea, which is crucial for regional stability and security.
• The FTA is also a means for the US to counter the effects of other regional trade agreements that may be more favorable to its competitors.

Conclusion

While the KORUS FTA is expected to bring substantial economic benefits, particularly for US agricultural exporters and the Korean auto industry, it has also sparked significant political and labor opposition, especially in the US. The debate over the agreement reflects broader concerns about trade imbalances, market access, and the impact of globalization on domestic industries. Ultimately, the FTA is seen as a necessary step for both countries to improve their economic relations, but its success will depend on how effectively both sides implement and adapt to the new trade environment.