Congress last week passed three long-stalled Free Trade Agreements (FTA) with South Korea, Colombia and Panama. South Korea is the United States' seventh-largest trading partner with $88 billion in two-way trade, making the newly signed Korea-U.S. FTA—known as KORUS—the largest enacted by the U.S. since the passage of the North American Free Trade Agreement.
Bilateral car trading has been a major point of contention in U.S.–South Korea trade relations and, consequently, a major sticking point in negotiations on the KORUS FTA. In 2010, U.S. automakers exported fewer than 14,000 cars to South Korea, while South Korea exported 515,000 cars to the United States, according to trade experts. South Korea has since pledged to open its market to U.S. vehicles.
The KORUS FTA includes a “low-volume seller exemption,” which would allow each U.S. automaker to sell up to 25,000 vehicles per year in South Korea built to U.S. safety standards without any additional modifications. The European Union (E.U.) has recently signed a similar FTA with Korea, which will become effective in July 2012.
Other U.S. FTAs approved at the same time include U.S.–Colombia and U.S.–Panama. Colombia is the third-largest economy in Latin and South America and the U.S.-Colombia FTA will provide significant new access to Colombia's $166 billion services market. Panama is one of the fastest-growing economies in Latin America whose GDP is expected to jump with the completion of the expanded Panama Canal in 2014.
Doing business in these markets and have questions? Contact Linda Spencer at lindas@sema.org.