Which kinds of U.S. exports will enjoy the biggest boost from the three new free trade agreements? Beyond its tariff provisions, the Korean pact attempts to eliminate non-tariff barriers to U.S. exports, such as regulatory practices that have made it hard for many non-Korean products to enter that market.
As a result, U.S. pharmaceutical makers, in particular, will receive stronger intellectual property protection, a change that seems certain to lower the market share of Korean makers of generic drugs. Exporters of U.S. agricultural products also are expected to prosper. South Korea’s output of agricultural, farming and fishery industries will decline $10.9 billion in the first 15 years after implementation of the agreement, according to a report by the country’s ministry of food and agriculture. Korean livestock producers, who fought to kill the pact, are expected to lose $6.3 billion in production during that period.
Korea’s automakers, auto parts makers, consumer electronics and machinery makers will be big winners after the U.S. lifts its tariffs of 1.5 to 5 percent on Korean-made electronics goods, such as big-screen televisions. The tariff cuts should benefit U.S. importers and retailers such as Best Buy and Wal-Mart, which may cut their retail prices — to attract more consumers — or improve their margins by not lowering prices. U.S. importers of Korean textiles also will benefit after the U.S. eliminates tariffs on Korean products that have averaged approximately 13 percent.
U.S. exporters of a wide range of manufactured goods also will benefit in Colombia, especially suppliers of heavy machinery and construction equipment needed to implement the country’s multibillion-dollar national plan to upgrade its transportation, mining and energy infrastructure.
“For Caterpillar Corp., Colombia was in some ways more important than the agreement with Korea,” said Shaun Donnelly, vice president for investment and financial services at the U.S. Council for International Business.
Colombia offers opportunities for U.S. suppliers of equipment used to dredge Colombia’s rivers, upgrade its ports and provide vital services for the Panama Canal expansion. Direct exports of related equipment to Panama also will benefit from that expansion.
In Colombia, as in Korea, small-scale local farmers may be the biggest losers. An association of small and midsize rice growers implored the government in November for protection, arguing they will be unable to “compete under unequal conditions” after Colombian markets are opened to imports from the United States. Some 200,000 Colombian farm jobs in 211 townships are at stake.
Contact Alan M. Field at email@example.com.