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

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The Wine Institute and the CAWG stated that they supported throughout the negotiation process the immediate duty-free access to the South Korean market upon implementation for wine (HTS 2204, 2205, and 2206) and grape juice concentrate (HTS 2009.61 and 2009.69). Overall, the FTA will greatly enhance the competitive position of U.S. winemakers in South Korea’s extremely promising market, leading to large potential gains for the U.S. wine industry. The Wine Institute and the CAWG estimate that within a year of implementation of the FTA, exports will have grown by 150 percent relative to 2006 levels, and sales will total over $31 million, and that by 2012, 5 years after the agreement, exports will have grown by 480 percent, and sales will total over $72 million. They described Korea as a rapidly developing market for U.S. wine exports, and said it has potential for substantial growth. The market for wine in South Korea has grown by 283 percent in the past 5 years, and that wine consumption is growing by about 19 percent per year. They noted that U.S. wine exports to Korea currently face a tariff rate of 15 percent for wine and 45 percent for grape juice concentrate. The Chilean share of Korea’s wine market has grown from about 4 percent in 2004, when the Chile-South Korea FTA was signed, to 17 percent, while the U.S. share has remained constant at about 14 percent. They added that Chile is also increasing its share of the Korean grape juice market at the expense of U.S. producers as a result of its preferential duty treatment in the Korean market. The U.S. duty rates on both wine and grape juice concentrate would immediately fall to free upon implementation of the FTA, making U.S. exports more competitive in the Korean market. The Wine Institute and the CAWG stated that the effect of the FTA on the U.S. wine industry will be significant and extremely positive and that the FTA will help U.S. wine exporters compete with their Chilean counterparts. This will improve the competitive position of U.S. wines in the Korean market and enable the U.S. wine and grape juice concentrate industries to solidify their positions in Asian markets. 7-34
Bibliography Advanced Medical Technology Association (AdvaMed). Testimony before the Trade Policy Staff Committee, Office of the USTR in connection with the U.S.-Korea Free Trade Agreement, March 14, 2006. http://www.advamed.org/NR/rdonlyres/F96D72CF-6F5A-4804-8A54-95ECF2C600A6/0/korea_f ta_testimony.pdf. ______. “AdvaMed Welcomes U.S./Korea Free Trade Agreement (April 3, 2007).” http://www.advamed.org/MemberPortal/About/NewsRoom/NewsReleases/050307-PR-Welcomes USKorea.htm. Advisory Committee for Trade Policy and Negotiations (ACTPN). Report to the President, the Congress, and the United States Trade Representative on the U.S.-Korea Free Trade Agreement (KORUS), April 26, 2007. AeA. “The U.S.-South Korea Free Trade Agreement Will Improve Access for U.S. High Tech,” June 19, 2007. http://www.aeanet.org/pressroom/prac_061907_korea_trade_2007.asp. Agence France-Presse. “Amnesty urges South Korea to improve foreign workers' rights,” April 30, 2007. http://services.inquirer.net/print/print.php?article_id=63302 Agricultural Policy Advisory Committee (APAC) for Trade. Agricultural Policy Advisory Committee for Trade Report to the President, the Congress, and the United States Trade Representative on the U.S.-Korea Free Trade Agreement, April 27, 2007. Agricultural Technical Advisory Committee (ATAC) for Grains, Feed, and Oilseeds. Advisory Committee Report to the President, the Congress and the United States Trade Representative on the Korea-U.S. Free Trade Agreement, April 25, 2007. American Chamber of Commerce (AMCHAM) in Korea. “AMCHAM Applauds Successful Conclusion of the U.S.-Korean FTA.” Washington, DC, 2007. http://www.uskoreafta.org/NR/rdonlyres/esz4ocag3yd7hbu7cdyih24cawbk6h6ahm6idegwhxchza sm4vppykxs53ku6tpwx67fpeusgyc3a3cl4umv7hgg4oc/AMCHAMPressReleaseFTACompleted4 207.doc. American Dehydrated Onion and -Garlic Association. “US.-Republic of Korea Free Trade Agreement: Advice Concerning the Probable Economic Effect of Providing Duty-Free Treatment for Imports.” Written submission to the USITC in connection with inv. Nos. TA-131-32 and TA-2104-21, April 27, 2006. http://edisweb.usitc.gov/edismirror/131-032/Final/252896/286407/266/74829e.pdf. American Manufacturing Trade Action Coalition. “Post Hearing Submission – United States/Republic of Korea Free Trade Agreement.” Written submission to the USITC in connection with invs. Nos. TA-131-32 and TA-2104-21, April 27, 2006. http://edisweb.usitc.gov/edismirror/131-032/Final/252960/286370/b2a/7450ca.pdf. Biblio-1
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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
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Noncitrus Fruit 87 Views of Interes
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3-20 Table 3.9 U.S.-Korea trade and
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Korean grapes are much more costly
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Potato Products 122 Assessment The
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ate is 304 percent ad valorem. 141
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Other Vegetables 162 Assessment The
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U.S. exports of other fresh and pro
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tariff concessions that could accru
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Dairy Products 215 Similarly, the p
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TRQ for food whey, 223 based on cur
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potential changes in trade based so
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Figure Figure 3.1 Korea: Beef and v
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Views of Interested Parties The inc
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are subject to the same food safety
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enefit under the provisions of this
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Box 3.2 Potential price and quantit
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50 percent, while the vegetable jui
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and major supplier, and U.S. tariff
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textiles and apparel through 2005.
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U.S. Exports The impact of the FTA
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passage. NCTO indicated that, even
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In its report, the ITAC on Distribu
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of the U.S. footwear market, with C
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of these producers. 362 RPFMA noted
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prohibit improper inducements by ph
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Machinery, Electronics, and Transpo
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U.S. exports of auto parts would be
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imports from and exports to Korea.
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Passenger Vehicles 433 Assessment U
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Table 3.16 Korean passenger vehicle
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import activities have continued
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Box 3.4 Automotive-related FTA Prov
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access. The FTA affirms the parties
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gaining U.S. market share regardles
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keep the products out.” 492 Mr. B
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these vehicles to Korea. The commit
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Brown expressed concern about the r
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goods; and high-technology medical,
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device pricing, reimbursement, and
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CHAPTER 4 Impact of Market Access P
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elative to GDP than do China, Japan
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services as a substantial improveme
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Box 4.2 Financial services: Competi
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Summary of Provisions Chapter 13 of
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national treatment, full establishm
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Box 4.4 Competitive conditions in t
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and cross-connect links 70 are more
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Box 4.5 U.S. legal services trade w
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establish offices in Korea to provi
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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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Page 218 and 219: Views of Interested Parties A numbe
Page 220 and 221: GPHA stated in testimony before the
Page 222 and 223: Box 6.3 Labor market conditions in
Page 224 and 225: FTA Chapter 20—Environment 131 As
Page 226 and 227: trade measures are the least disrup
Page 228 and 229: FTA Chapter 22-Institutional Provis
Page 230 and 231: Views of Interested Parties The Ind
Page 233 and 234: CHAPTER 7 Literature Review and Sum
Page 235 and 236: 7-3 Table 7.1 Model, liberalization
Page 237 and 238: terms. Much of the increase in U.S.
Page 239 and 240: Liberalization generated small incr
Page 241 and 242: Sander Levin, Member of the U.S. Ho
Page 243 and 244: Regarding footwear and travel goods
Page 245 and 246: Korea’s establishment as a region
Page 247 and 248: The California Table Grape Commissi
Page 249 and 250: order activity, and facilitate expa
Page 251 and 252: At the Commission’s hearing, Mr.
Page 253 and 254: Information Technology Industry Cou
Page 255 and 256: With respect to tariff and nontarif
Page 257 and 258: deterring illegal transshipments. I
Page 259 and 260: PhRMA identified what it views as t
Page 261 and 262: the TIA stated that it supports the
Page 263 and 264: access to the market. The Council a
Page 265: United States, Spain, Chile, Brazil
Page 269 and 270: AT&T. “AT&T Reaction to Free Trad
Page 271 and 272: ______. “Korea-U.S. Free Trade Re
Page 273 and 274: ______. “Country Finance: South K
Page 275 and 276: Global Trade Information Services I
Page 277 and 278: International Labor Organization (I
Page 279 and 280: Jones, Laura E. Executive Director.
Page 281 and 282: Lee, Hyunok, and Daniel A. Sumner.
Page 283 and 284: Nam, In-Soo. “Helio's Losses To W
Page 285 and 286: Powers, Mark. Northwest Horticultur
Page 287 and 288: Smith, Brad. American Council of Li
Page 289 and 290: U.S.-Korea Business Council (USKBC)
Page 291 and 292: ______. “Korea, Republic of Oilse
Page 293 and 294: U.S. International Trade Commission
Page 295 and 296: Ward, David. American Council on Ed
Page 297: APPENDIX A Request Letter from USTR
Page 301: APPENDIX B Federal Register Notices
Page 304 and 305: pwalker on PROD1PC71 with NOTICES 2
Page 307: APPENDIX C Hearing Participants
Page 310 and 311: ORGANIZATION AND WITNESS: PANEL 1 (
Page 313: 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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