On September 3, 2018 the Office of the United States Trade Representative (USTR) and the Republic of Korea’s Ministry of Trade, Industry and Energy published the “Agreed Outcomes” from the U.S. – Korea Free Trade Agreement (KORUS) amendment and modifications negotiations.
According to U.S. Trade Representative Robert Lighthizer, “The United States and Korea have strengthened an important economic relationship by agreeing to substantial improvements to KORUS that will help rebalance our trade, reduce our trade deficit, and expand U.S. export opportunities”.
KORUS went into effect in 2012. Special sessions of the KORUS Joint Committee began in July 2017 with further negotiations of amendments and modifications concluding in March 2018. Some of the “Agreed Outcomes” are as follows:
- Korea agreed to extend the phase out of the 25% U.S. tariff on trucks to 2041 (originally scheduled to phase out in 2021);
- Korea will double the number of U.S. automobile exports that meet the U.S. safety standards to 50,000 per manufacturer per year;
- Testing requirements for gasoline engine vehicle emissions will be harmonized, avoiding duplicate testing;
- Korea agreed to recognize U.S. standards for auto parts and reduce labeling burdens for parts;
- Korea will improve the corporate average fuel economy standards by expanding “eco credits” available to help meet fuel economy and greenhouse gas requirements;
- Korea will establish a working group to monitor and address KORUS verification of origin standards;
- Korea will amend policies to ensure non-discriminatory and fair treatment for U.S. pharmaceutical exports.
In addition to the KORUS FTA outcomes noted above, other actions were taken:
- In order to maintain a level playing field for trade and investment, a currency agreement or memorandum of understanding is being finalized to prevent exchange rate manipulation.
- Although Korean imports of steel products will continue to be exempt from the Section 232 tariffs on steel and aluminum, Korean imports of steel products into the United States will be subject to a product-specific quota equivalent to 70% of the average annual import volume of such products during the period of 2015-17. This will result in a significant reduction in Korean steel shipments to the United States.
For additional information from the USTR, use the following links:
For additional details, please contact your local MIQ Logistics representative.