March 15, 2015 marked the third anniversary of the historic, high-standard Korea-U.S. Free Trade Agreement (KORUS FTA) entering into force. Overall U.S.-Korea trade, exports of U.S. goods to Korea, and of Korean goods to the United States all increased in 2014, a clear example of KORUS FTA’s positive, market-opening effects.
“This agreement truly has been win-win. It’s provided benefits to our workers, to farmers, to consumers and to our citizens.”- Wendy Cutler, Chief Negotiator, KORUS
“In just three years, KORUS has strengthened our economic partnership, a dynamic relationship that has delivered tangible benefits in both Korea and the United States.” – U.S. Ambassador to the ROK Mark Lippert
KORUS is Good for Korea and Good for the United States
Korean exports of agricultural, fish, and forest products increased to $579 million, despite concerns that these sectors would not thrive under KORUS. More Americans enjoy Korean products such as Korean pears, kimchi, oysters, dried seaweed, and red-pepper paste, thanks to KORUS. Korean services and investment are both up as well, and KORUS has helped Korea attract more foreign direct investment (FDI) due to a more liberalized and transparent Korean market.
2014 U.S. manufacturing exports to Korea were up 5.6 percent to a record $37.4 billion and are up by nearly $3 billion from pre-KORUS figures. This includes semiconductors, chemicals, autos, machinery, and equipment. Korea is currently our fifth-largest market for agricultural exports, which were up 31 percent to $6.9 billion in 2014. This was nearly seven times faster than U.S. agricultural export growth to the world. U.S. services exports have also grown because of KORUS, at a rate nearly twice as fast as U.S. services growth to the world.
Economic Linkages are Win-Win
U.S. technology firms play key roles in Korea’s manufacturing ecosystem, supporting higher value added manufacturing sectors in both nations. 3M Korea uses U.S. technology and inputs to manufacture cutting-edge films and chemicals in Korea that are crucial to Samsung, LG, and other Korean customers building world-class flat-panel displays and other high-tech products for export. 3M employs 1,700 people at its Dongtan Innovation Center and at other facilities around the country. And, as Korea’s economy moves into new sectors such as aerospace, 75 percent of Korea’s aircraft, parts and component imports are from the United States, and enter duty-free under KORUS. Hyundai and Kia are major employers of U.S. autoworkers at their plants in Alabama and Georgia, while GM Korea is a major employer of Korean autoworkers.
Total Trade is Up. Korea is now our sixth largest trading partner, with total trade up 9.6 percent in 2014, reaching a record $114 billion.
Goods Exports are Up. Korean goods exports to the United States were up 12 percent in 2014. U.S. goods exports to Korea were up 6.8 percent in 2014, increasing from $41.7 billion in 2013 to $44.5 billion in 2014.
Agricultural Products are Up. Korean agricultural, fish, and forest exports have increased because of KORUS, increasing to $579 million in 2014. Korean pears ($27 million), oysters ($7.6 million), and samgyetang ($1.2 million) were at record levels. On the U.S. side, recovery from drought in the United States contributed to a 31 percent, or $1.6 billion, increase in agricultural exports to Korea, including almonds, wine, cheese, cherries, and lemons.
Services Exports are Up. Services exports also continued to grow in both directions. Korean services exports are up to $10.8 billion in 2013 (latest complete year) and U.S. services exports are up too, increasing to $21 billion in 2013. One large component of U.S. services that clearly benefits both nations is educating Korean students in the United States. Korea ranks third in number of citizens studying in the United States (after China and India), and number one per capita.
Investment is Up. Bilateral investment is also on the rise for both economies as KORUS provisions improve transparency and increase investor confidence by encouraging fair, transparent, and predictable economic policymaking. In the United States, we are delighted to host major investments from marquee firms like Samsung, Hyundai, and many others. And here in Korea, U.S. investment over 50 years totals more than $30 billion, supporting tens of thousands of good-paying jobs for the Korean people.
More Work to Do. The U.S. government will continue to work with the U.S. business community and Korean government counterparts to fully implement the KORUS FTA and work towards an improved business-friendly regulatory environment that allows businesses and consumers in both our countries to enjoy the full benefits of KORUS.