U.S. Secretary of Agriculture Sonny Perdue today issued the following statement regarding the signing of the new United States-Republic of Korea Free Trade Agreement (KORUS):
“We are entering into a new KORUS agreement that is a better deal for the entire United States economy, including the agricultural sector. This represents an important improvement in trade relations between our two nations, building on long-standing cooperation we have enjoyed. This agreement adds to the momentum building for President Trump’s approach to trade, which is to stand strong for America’s interests and strike better deals. I am optimistic that the dominoes will continue to fall: KORUS, then a new NAFTA, and new agreements with the European Union, Japan, and, most notably, China. As an avid sportsman, I would say ‘put this one in the bag and keep hunting for more.’”
“We want to make a deal that’s fair for the United States and fair for South Korea.” – President Donald J. Trump
IMPROVING BAD TRADE DEALS: President Donald J. Trump has fulfilled his promise to fight for American workers and businesses in an amended trade deal with South Korea.
- In July 2017, at the direction of the President, United States Trade Representative (USTR) Robert Lighthizer initiated discussions to amend the United States–Korea Free Trade Agreement (KORUS), setting off multiple rounds of negotiations.
- Since KORUS went into effect in 2012, USTR calculated that the overall trade deficit between the United States and Korea has increased from $6.3 billion to $9.8 billion in 2017, a jump of more than 50 percent.
LEVELING THE PLAYING FIELD: The Trump Administration has secured key improvements to KORUS that will protect jobs in America’s auto industry and increase United States exports.
- As a result of negotiations, South Korea will double the annual number of American automobiles – from 25,000 to 50,000 per manufacturer per year – that can enter its market using United States safety standards without further modifications.
- South Korea is simplifying the sales environment for United States cars and parts by taking into account United States environmental and emissions standards.
- American vehicles will be able to meet South Korean gasoline emissions standards based on compliance with United States emissions regulations, avoiding additional or duplicative testing.
- South Korea will recognize United States standards for auto parts necessary to service United States vehicles, and will reduce labeling burdens for auto parts.
- South Korea will expand the number of “eco-credits” available for United States automakers to meet South Korean emissions standards.
- When setting fuel economy standards in the future, South Korea will take United States corporate average fuel economy regulations into account and will continue to include more lenient standards for smaller volume exporters.
- The phase out of the 25 percent United States tariff on trucks will be extended until 2041, well beyond the current phase out date of 2021.
CUTTING THE RED TAPE ON UNITED STATES EXPORTS AND HOLDING TRADE PARTNERS ACCOUNTABLE: The Trump Administration’s negotiations will eliminate burdensome regulations that have impeded United States exports and ensure that trade partners follow through on implementation.
- South Korea has agreed to address issues with onerous and costly customs procedures that have hindered United States exports.
- South Korea has agreed to change its pharmaceutical reimbursement policy for innovative drugs to give fair treatment to United States exports by the end of this year, consistent with its KORUS obligations.
DEFENDING AMERICAN STEEL: Outside the context of KORUS, the Trump Administration has reached a deal with South Korea to protect American steel manufacturers and national security.
- On March 8, 2018, after receiving a report and recommendations from Secretary of Commerce Wilbur Ross, President Trump announced tariffs on imported steel under Section 232 of the Trade Expansion Act of 1962, as amended, in order to defend America’s national security.
- The Trump Administration has reached satisfactory alternative means with South Korea to address United States national-security concerns.
- Steel imports from South Korea into the United States will be limited to a product-specific quota equal to 70 percent of that country’s average annual import volume from 2015 through 2017.
ADDRESSING UNFAIR CURRENCY PRACTICES: The Trump Administration is working to ensure that American goods are treated fairly and that our trading partners avoid unfair currency practices.
- Outside the context of KORUS, the Treasury Department has an understanding with South Korea to avoid competitive devaluation and practices that provide an unfair competitive advantage.
- The understanding includes strong commitments on exchange rate practices, robust transparency, and reporting.