The Korean Free Trade Agreement: A Boon for International Trade
The Korean Free Trade Agreement, or KORUS FTA, is a landmark agreement between the United States and South Korea that eliminates tariffs on a wide range of goods and services traded between the two countries. First signed in 2007, and implemented in 2012, this agreement has opened up new opportunities for businesses in both countries and has helped to strengthen economic ties between them.
One of the main benefits of the KORUS FTA is the elimination of tariffs on goods and services traded between the United States and South Korea. This has resulted in increased competition and lower prices for consumers in both countries. For example, before the KORUS FTA, South Korean automakers faced a 2.5% tariff on cars exported to the United States. Today, that tariff has been eliminated, making it easier and more cost-effective for South Korean automakers to sell their cars to American consumers.
In addition to the elimination of tariffs, the KORUS FTA also includes provisions that protect intellectual property and provide a framework for resolving disputes between businesses in both countries. This helps to create a more stable and predictable environment for international trade and encourages businesses to invest and innovate.
Critics of the KORUS FTA argue that it has resulted in a trade deficit for the United States, as imports from South Korea have increased faster than exports to the country. However, supporters of the agreement point out that it has created new opportunities for American businesses to sell their goods and services to South Korean consumers, and that the trade deficit is largely driven by factors outside of the agreement.
Overall, the KORUS FTA has been a positive development for international trade, particularly between the United States and South Korea. By eliminating tariffs and creating a framework for resolving disputes, this agreement has helped to create a more predictable and stable environment for businesses in both countries.
