The U.S.-Korea Free Trade Agreement took effect Thursday, giving American exporters greater access to the South Korean market.
The pact eliminates tariffs on 95 percent of each country’s goods over five years. All told, the agreement will add some $9.7 billion to U.S. exports, according to the International Trade Commission.
Trade groups applauded when the Senate finally approved the agreement last December. Negotiations began in 2006, and the two sides reached agreement in 2007, but the deal sat in congressional limbo for four years. The Obama administration reopened the agreement to get a better deal for U.S. automakers, and a new bilateral deal was reached in 2010. Congress finally approved the deal last fall, along with similar bilateral pacts with Colombia and Panama.
The prolonged negotiations worried trade groups that FTAs with other countries, including the European Union, Canada and Australia, put U.S. exporters at a competitive disadvantage.
Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers, said the agreement is “a big deal.” South Korea represents the fourth-largest foreign market after Canada, Mexico and the EU.
“Korea imports nearly $300 billion of manufactured goods annually,” Vargo said. “Manufacturers in the U.S. have only 11 percent of that market, but are now poised to make gains.”