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

Korea’s establishment as a regional insurance center, and sets the standard for future
financial-services negotiations in FTAs.
While the Korean insurance market is open in theory, U.S. insurers currently face barriers
to competition. AIA noted that the following provisions, included in the FTA, would help
to address such barriers: use of the negative list approach; inclusion of national treatment,
MFN treatment, market access, and cross-border trade provisions; protection of new
financial services offerings; absence of nationality requirements for management and
directors; comprehensive regulatory transparency provisions; inclusion of new rules for selfregulatory
organizations; and mechanisms for ongoing consultation and dispute settlement.
American Manufacturing Trade Action Coalition 28
In a written submission to the Commission, the American Manufacturing Trade Action
Coalition (AMTAC), a trade association representing a wide range of industrial sectors,
including textiles, apparel, chemicals, furniture, tool and die, mold making, metal products,
packaging products, lumber, and luggage, reported that, given Korea’s current capabilities
as a major producer and exporter of industrial goods, the FTA will be a “major blow” to the
U.S. manufacturing base, especially for textiles and apparel. It is concerned that Korea has
a history of using unfair trading practices and it questioned whether U.S. Customs would be
able to monitor and enforce the FTA. AMTAC added that, given Korea’s proximity to
China, where production costs are much lower, China will have an enormous incentive to
take advantage of Korea’s zero-duty access to the U.S. market through illegal transshipments
and false documentation. AMTAC noted that the FTA would present unique concerns
beyond those associated with previous FTAs such as CAFTA-DR, where the free trade
partners generally were apparel assemblers with limited textile capabilities. AMTAC stated
that the FTA would grant Korea immediate duty-free access to the U.S. market for 60
percent of the textile product categories that it identifies as sensitive, including those covered
by the U.S.-China Textile Bilateral Agreement, threatening both U.S. domestic sales and
U.S. coproduction relationships in the NAFTA/CAFTA region. According to AMTAC, the
FTA tariff phaseout schedule would likely undermine the U.S.-China Textile Bilateral and
create increased potential for illegal transshipments in the region. AMTAC also commented
that Korea has only limited ability to consume finished goods manufactured in the United
States, and said that it expects to see a significant increase in the U.S. trade deficit and the
loss of more textile and apparel jobs in the United States as a result of the FTA.
American Potato Trade Alliance 29
In a written submission to the Commission, the American Potato Trade Alliance (APTA),
composed of potato-grower organizations, national potato organizations, major processing
companies, an academic institution, an export company, a U.S. port, and quick-service
restaurants, stated that it strongly supports implementation of the recently concluded U.S.-
Korea FTA. APTA added that implementation of the agreement is vital to the U.S. firms
involved in exporting potato products to Korea. It reported that, despite current tariffs, Korea
represents a large export market for frozen potato products, noting that U.S. exports of
28 American Manufacturing Trade Action Coalition, written submission, June 27, 2007.
29 American Potato Trade Alliance, Steering Committee, written submission, June 22, 2007.
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