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

strongly supports the U.S.-Korea FTA, and particularly praises provisions that would treat
both textile and nontextile travel goods the same, with both receiving immediate and
reciprocal duty-free entry under flexible rules of origin. The TGA noted that with the
exception of CAFTA-DR and the Panama TPA, every trade agreement in recent years has
applied different rules of origin to textile and nontextile travel goods. The more restrictive
fabric-forward rule of origin for textile travel goods in these agreements have essentially
rendered those agreements useless to U.S. travel goods firms. The language of the U.S.-
Korea FTA provides a strong precedent to ensure that all future agreements provide equal,
flexible, and reciprocal treatment for all travel goods. According to TGA, incorporating these
rules into an FTA with a major trading partner like Korea, one of the fastest-growing markets
for imported travel goods, will make the FTA a “landmark agreement” for the U.S. travel
goods industry and be of potential benefit to the domestic industry.
U.S.-Korea Business Council 58
In written and hearing testimony, the U.S.-Korea Business Council (Council) stated that it
is a private-sector organization run by the U.S. Chamber of Commerce and composed of
U.S. companies that are significant investors in Korea. The Council supports the U.S.-Korea
Free Trade Agreement (FTA). It reported that the FTA will provide substantial new
protections and opportunities to U.S. producers and investors with the elimination or
reduction of both U.S. and Korean barriers to imports and other cross-border business.
Further, it added that the agreement is comprehensive and satisfactorily addresses a
significant number of nontariff barriers that have long presented challenges to doing business
in Korea.
The Council stated that the agreement “includes some of the strongest chapters yet
negotiated within a U.S. FTA on intellectual property, financial services, competition,
transparency, and other rules that set important new precedents for future bilateral and
multilateral agreements.” With respect to the investment provisions, the Council believes that
“by strengthening investor protections and enhancing the transparency and predictability of
Korea’s regulatory process, the agreement is expected to draw more U.S. investors to
Korea.” The agreement would secure a preferential position in Asia for U.S. businesses and
farmers.
The Council said that it welcomes the “strong commitment” by the Korean government to
promote transparency in Korea’s regulatory process. It is pleased that “the transparency
chapter commitments by the Korean government to publish proposed regulations in advance,
allow a reasonable opportunity to comment on the proposed regulations, address significant
substantive comments received and publish final regulations in an official journal of national
circulation.” The Council also supports the transparency provisions in other key areas.
With regard to services trade, the Council welcomes the Korean government’s commitment
in audiovisual services to lock in a reduced 73-day local screen quota and existing access for
foreign broadcasters, and the expansion of the level of “permissible foreign content on
television.” Furthermore, the FTA would provide U.S. express service companies increased
58 Robert C. Reis, Jr., executive vice president, U.S.-Korea Business Council, testimony before the U.S.
International Trade Commission, June 20, 2007; written submission, June 20, 2007; and Sean Connell,
executive director, U.S.-Korea Business Council, posthearing submission, June 27, 2007. The views are
represented by the U.S.-Korea Business Council and their affiliates, the U.S. Chamber of Commerce and the
American Chamber of Commerce in Korea.
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