U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

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Machinery, Electronics, and Transportation Equipment 399 Assessment The U.S.-Korea FTA would likely result in increased exports of U.S. machinery, electronics, and transportation equipment (machinery and equipment) to Korea. U.S. exports may benefit from the immediate or phased elimination of Korean tariffs ranging from 3 to 13 percent ad valorem on U.S. machinery and equipment, as well as from the implementation of nontariff market access provisions of the FTA. In the electronics sector, the majority of products, such as semiconductors, telecommunications equipment, and computer equipment already receive duty-free access to the Korean market under the WTO’s Information Technology Agreement (ITA). Electronics products not covered by the ITA, such as consumer electronics (CE), generally face an 8 percent duty in Korea; a majority of CE products would receive duty-free access upon implementation of the FTA. There is also an 8 percent duty on many machinery products exported to Korea, and most of these products would receive immediate duty-free access upon implementation of the FTA. In terms of the transportation equipment sector (excluding passenger vehicles), 400 most U.S. products, such as civil aircraft, currently receive duty-free access to the Korean market. Certain transportation equipment, such as tugs and light vessels, currently face a 5 percent Korean duty, and the FTA would provide U.S. firms immediate duty-free access. Machinery and equipment products were among the top U.S. exports to Korea in 2006. 401 Leading U.S. export groups under this category included semiconductors, aircraft, miscellaneous machinery, and certain machine tools (table 3.13). Leading U.S. imports from Korea were certain motor vehicles, certain transmission apparatus, semiconductors, and computer parts (table 3.14). A number of U.S. machinery and equipment sectors will likely benefit from expanded export opportunities in Korea as a result of trade liberalization under the FTA, including automotive parts; electronics, such as wireless broadband equipment and computer software; and various types of machinery, including machine tools, electrical power systems, and security products. 402 399 This sector will provide an general overview of products covered in HTS chapters 84–90. Separate assessments of the medical goods sector and certain passenger vehicles are contained later in the chapter. The products covered in this assessment represent most of the U.S. exports to and imports from Korea in the GTAP “electronic equipment,” “transport equipment,” and “machinery and equipment n.e.c.” sectors, for 2006. 400 See this chapter’s section on passenger vehicles for additional information regarding the sector. 401 Leading U.S. domestic exports to Korea in 2006 consisted of goods falling in HTS chapters 84–90. U.S. domestic exports of products under these HTS chapters were approximately $18.2 billion. 402 “Security products” covers a broad range of products, such as airport security equipment. 3-68
Table 3.13 Leading U.S. exports of machinery and equipment to Korea 2004–06 (1,000 dollars) HTS Description 2004 2005 2006 8542 Semiconductors and parts 3,936,539 4,098,851 4,256,170 8802 Aircraft 1,143,708 1,228,050 2,408,073 8479 Miscellaneous machinery 821,898 981,829 1,504,669 8803 Parts of aircraft 589,904 623,430 1,004,684 8456 Certain machine tools 364,986 631,854 691,842 8411 Turbojets, turbopropellers, and other gas turbines and parts 521,567 632,930 566,279 8543 Certain electrical machines and parts 466,434 470,444 511,785 8471 Computer equipment 432,024 392,503 442,937 8708 Parts for certain tractors, certain auto parts, and transportation equipment 358,593 432,251 436,686 9001 Optical fibers and optical fiber bundles 311,920 374,215 430,957 Subtotal 8,947,573 9,866,357 12,254,081 All other sector exports 4,822,048 5,408,474 5,927,183 Total 13,769,621 15,274,832 18,181,264 Source: Compiled from official statistics of the U.S. Department of Commerce. Table 3.14 Leading U.S. imports of machinery and equipment from Korea, 2004–06 (1,000 dollars) HTS Description 2004 2005 2006 8703 Certain motor vehicles 10,033,594 8,969,547 9,099,707 8525 Transmission apparatus for radio broadcasting or television; certain cameras 8,460,161 6,246,863 5,596,931 8542 Semiconductors and parts 3,787,615 2,903,298 2,851,934 8473 Parts and accessories of computer and office equipment 2,136,488 1,794,221 2,104,978 8708 Parts and accessories for certain tractors, certain auto parts, and transportation equipment 650,497 1,138,472 1,527,381 8471 Computer equipment 1,610,161 1,161,739 975,824 8429 Bulldozers and other self-propelled earth-moving machinery 385,069 445,463 530,969 8418 Certain machinery (refrigerators, freezers and other freezing equipment, heat pumps, and parts) 219,759 361,298 470,170 8528 Certain monitors and projectors 974,613 717,311 397,229 8529 Television, radio, and radar apparatus parts 501,821 454,965 346,781 Subtotal 28,759,778 24,193,177 23,901,903 All other sector imports 5,925,600 7,336,926 7,556,013 Total 34,685,378 31,530,102 31,457,916 Source: Compiled from official statistics of the U.S. Department of Commerce. 3-69
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U.S. International Trade Commission
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This report was prepared principall
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CONTENTS-Continued Chapter 3. Secto
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CONTENTS—Continued Chapter 5. Imp
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CONTENTS-Continued Chapter 7. Liter
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CONTENTS-Continued Tables—Continu
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Abbreviations and Acronyms 3G third
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Abbreviations and Acronyms—Contin
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Abbreviations and Acronyms—Contin
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vehicles) would likely be diverted
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Sector-specific Assessments The U.S
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total increased fish imports from K
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Korea would likely limit the impact
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Intellectual property rights (IPR):
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sector barriers. 5 These merchandis
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Table 1.1 U.S.-Korea FTA: Location
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Table 1.2 Korean tariff rates on im
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Table 1.4 U.S.-Korea FTA: Summary o
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observed GDP for model regions). Th
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Box 2.1 Interpreting the model resu
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Table 2.1 U.S.-Korea FTA: Simulated
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2-8 This page has been updated to r
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Figure 2.2 U.S-Korea FTA: Simulated
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As shown in figure 2.2, the largest
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2-14 This page has been updated to
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Economy-wide Impact of Implementing
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Grain (Wheat, Corn, and Other Feed
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Korea imported 3.8 million mt of wh
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U.S. oilseed product exports to Kor
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Table 3.2 U.S. oilseed product expo
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Table 3.3 Animal feed exports to Ko
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consumed domestically by the U.S. l
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ates. For corn starch, the United S
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quota rates have been effectively e
Page 72 and 73: Noncitrus Fruit 87 Views of Interes
Page 74 and 75: 3-20 Table 3.9 U.S.-Korea trade and
Page 76 and 77: Korean grapes are much more costly
Page 78 and 79: Potato Products 122 Assessment The
Page 80 and 81: ate is 304 percent ad valorem. 141
Page 82 and 83: Other Vegetables 162 Assessment The
Page 84 and 85: U.S. exports of other fresh and pro
Page 86 and 87: tariff concessions that could accru
Page 88 and 89: Dairy Products 215 Similarly, the p
Page 90 and 91: TRQ for food whey, 223 based on cur
Page 92 and 93: potential changes in trade based so
Page 94 and 95: Figure Figure 3.1 Korea: Beef and v
Page 96 and 97: Views of Interested Parties The inc
Page 98 and 99: are subject to the same food safety
Page 100 and 101: enefit under the provisions of this
Page 102 and 103: Box 3.2 Potential price and quantit
Page 104 and 105: 50 percent, while the vegetable jui
Page 106 and 107: and major supplier, and U.S. tariff
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Page 110 and 111: U.S. Exports The impact of the FTA
Page 112 and 113: passage. NCTO indicated that, even
Page 114 and 115: In its report, the ITAC on Distribu
Page 116 and 117: of the U.S. footwear market, with C
Page 118 and 119: of these producers. 362 RPFMA noted
Page 120 and 121: prohibit improper inducements by ph
Page 124 and 125: U.S. exports of auto parts would be
Page 126 and 127: imports from and exports to Korea.
Page 128 and 129: Passenger Vehicles 433 Assessment U
Page 130 and 131: Table 3.16 Korean passenger vehicle
Page 132 and 133: import activities have continued
Page 134 and 135: Box 3.4 Automotive-related FTA Prov
Page 136 and 137: access. The FTA affirms the parties
Page 138 and 139: gaining U.S. market share regardles
Page 140 and 141: keep the products out.” 492 Mr. B
Page 142 and 143: these vehicles to Korea. The commit
Page 144 and 145: Brown expressed concern about the r
Page 146 and 147: goods; and high-technology medical,
Page 148 and 149: device pricing, reimbursement, and
Page 151 and 152: CHAPTER 4 Impact of Market Access P
Page 153 and 154: elative to GDP than do China, Japan
Page 155 and 156: services as a substantial improveme
Page 157 and 158: Box 4.2 Financial services: Competi
Page 159 and 160: Summary of Provisions Chapter 13 of
Page 161 and 162: national treatment, full establishm
Page 163 and 164: Box 4.4 Competitive conditions in t
Page 165 and 166: and cross-connect links 70 are more
Page 167 and 168: Box 4.5 U.S. legal services trade w
Page 169 and 170: establish offices in Korea to provi
Page 171 and 172: Box 4.6 Competitive conditions in t
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equirements and foreign ownership r
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CHAPTER 5 Impact of Trade Facilitat
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publication and administration of t
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Views of Interested Parties In its
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Summary of Provisions This chapter
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use of TBTs to protect Korea’s au
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conformity assessment procedures el
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FTA Chapter 15-Electronic Commerce
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Views of Interested Parties The U.S
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quantities as to be a substantial c
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that such transshipment could imped
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Box 6.1 Foreign investment in Korea
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in the FTA. The awards made by any
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Table 6.1 U.S.-Korea FTA: Industry
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(ITAC 5) report cited as particular
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Section C of Chapter 11 and the lac
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practices, and violations of consum
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FTA Chapter 17—Government Procure
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Both the United States and Korea ar
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8) 87 also expressed support for th
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Box 6.2 Recent conditions of IPR pr
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protection to life of the author pl
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Views of Interested Parties A numbe
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GPHA stated in testimony before the
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Box 6.3 Labor market conditions in
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FTA Chapter 20—Environment 131 As
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trade measures are the least disrup
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FTA Chapter 22-Institutional Provis
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Views of Interested Parties The Ind
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CHAPTER 7 Literature Review and Sum
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7-3 Table 7.1 Model, liberalization
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terms. Much of the increase in U.S.
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Liberalization generated small incr
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Sander Levin, Member of the U.S. Ho
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Regarding footwear and travel goods
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Korea’s establishment as a region
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The California Table Grape Commissi
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order activity, and facilitate expa
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At the Commission’s hearing, Mr.
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Information Technology Industry Cou
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With respect to tariff and nontarif
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deterring illegal transshipments. I
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PhRMA identified what it views as t
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the TIA stated that it supports the
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access to the market. The Council a
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United States, Spain, Chile, Brazil
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Bibliography Advanced Medical Techn
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AT&T. “AT&T Reaction to Free Trad
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______. “Korea-U.S. Free Trade Re
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______. “Country Finance: South K
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Global Trade Information Services I
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International Labor Organization (I
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Jones, Laura E. Executive Director.
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Lee, Hyunok, and Daniel A. Sumner.
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Nam, In-Soo. “Helio's Losses To W
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Powers, Mark. Northwest Horticultur
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Smith, Brad. American Council of Li
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U.S.-Korea Business Council (USKBC)
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______. “Korea, Republic of Oilse
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U.S. International Trade Commission
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Ward, David. American Council on Ed
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APPENDIX A Request Letter from USTR
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APPENDIX B Federal Register Notices
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pwalker on PROD1PC71 with NOTICES 2
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APPENDIX C Hearing Participants
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ORGANIZATION AND WITNESS: PANEL 1 (
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APPENDIX D U.S.-Korea FTA: Chapter-
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fees and charges on trade in goods
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determines the tariff classificatio
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The transparency provisions would a
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necessary duties within 1 year of i
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technical regulation or conformity
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procedures), and practices of a par
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aviation, fisheries, or maritime ma
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of standards and criteria and on te
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of the FTA that impose unilateral o
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use of electronic authentication in
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parties’ rights and obligations u
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establishment of Uniform Domain-Nam
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government to take appropriate meas
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environmental laws. 102 In the U.S.
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not limited to, policies on commerc
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Economic indicators 2002 2006 Popul
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Table E.1 Leading U.S. exports to K
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APPENDIX F GTAP Model
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Updating the GTAP Database The curr
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Key Assumptions Agency. 4 The price
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Table F.2 U.S.-Korea FTA benchmark
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Measuring the Impacts of the FTA an
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General Effects of Trade Agreements
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APPENDIX H Tariff Equivalents in Ko
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Previous Literature The method for
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For the purposes of this report, a
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Table H.1 Tariff equivalents in Kor
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APPENDIX I Services Nonconforming M
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Table I.1 U.S.-Korea FTA: Korean se
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APPENDIX J Description of Possible
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are in effect import prices, and th
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APPENDIX K Overview of Agricultural
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Additionally, although current regu
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About This Report The United States
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U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

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