President Trump continues to fulfill one of his key promises to the American people: to secure free, fair and reciprocal trade deals for the American worker.
The Republic of Korea is an important ally and key trading partner. Improving U.S.-Korea trade by rebalancing our trade and reducing the trade deficit will strengthen our economic and national security relationship.
Since the United States – Korea Free Trade Agreement (KORUS) went into effect in 2012, the U.S. trade deficit in goods with Korea increased by 75 percent from $13.2 billion to $23.1 billion (2017), while the overall deficit increased by 57 percent from $6.3 billion to $9.8 billion (2017).
Through negotiations to improve KORUS, the United States has secured changes that will reduce the trade deficit and ensure that KORUS is a good deal for American workers, farmers and businesses.
KEY NEW OUTCOMES FOR U.S. EXPORTERS
- The United States achieved important steps to improve the large trade deficit in industrial goods and to address KORUS implementation concerns that have hindered U.S. export growth.
- U.S. Truck Tariffs: Korea will extend the phase out of the 25% U.S. tariff on trucks until 2041, or a total of 30 years following the implementation of the KORUS FTA in 2012. (currently scheduled to phase out by 2021).
- Growing U.S. Auto Exports: Exports of U.S. motor vehicles to Korea will be improved through the following steps:
- Greater Access for U.S. Exports: Korea will double the number of U.S. automobile exports, to 50,000 cars per manufacturer per year that can meet U.S. safety standards (in lieu of Korean standards) and enter the Korean market without further modification.
- Harmonization of Testing Requirements: U.S. gasoline engine vehicle exports will be able to show compliance with Korea’s emission standards using the same tests they conduct to show compliance with U.S. regulations, without additional or duplicative testing for the Korean market.
- Recognition of U.S. Standards for Auto Parts: Korea will recognize U.S. standards for auto parts necessary to service U.S. vehicles, and reduce labeling burdens for parts.
- Improvements to CAFE Standards: Korea will expand the amount of “eco-credits” available to help meet fuel economy and greenhouse gas requirements under the regulations currently in force, while also ensuring that fuel economy targets in future regulations will be set taking U.S. regulations into account and will continue to include more lenient targets for manufacturers that sell small volumes of cars in Korea.
- Customs Improvement: Korea will address long-standing concerns with onerous and costly verification procedures through agreement on principles for conducting verification of origin of exports under KORUS and establish a working group to monitor and address future issues that arise.
- Pharmaceutical Reimbursements: Within 2018, Korea will amend its Premium Pricing Policy for Global Innovative Drugs to make it consistent with Korea’s commitments under KORUS to ensure non-discriminatory and fair treatment for U.S. pharmaceutical exports.
- U.S. Truck Tariffs: Korea will extend the phase out of the 25% U.S. tariff on trucks until 2041, or a total of 30 years following the implementation of the KORUS FTA in 2012. (currently scheduled to phase out by 2021).
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