U.S.-Republic of Korea Free Trade Agreement

On February 2, 2006, the U.S. Trade Representative announced its intent to negotiate a free trade agreement (FTA) with the Republic of Korea (Korea). On April 1, 2007, the United States and Korea concluded this historic FTA. At this time, the KORUS FTA, as this FTA is known, is currently not in force. It will need to be cleared through both countries’ legislatures prior to being fully implemented by both countries.

Why a Korea Free Trade Agreement?

The KORUS FTA is a comprehensive trade agreement that will eliminate tariffs and other barriers to trade in goods and services, promote economic growth, and strengthen economic ties between the United States and Korea. The KORUS FTA is the most commercially significant FTA for the United States since NAFTA. Korea is a $1 trillion economy and the 7th largest U.S. trading partner. Within the first three years after implementing the KORUS FTA, 95 percent of consumer and industrial products will become duty-free. The remaining tariffs will be eliminated within 10 years. This FTA will benefit farmers and ranchers by immediately eliminating duties on more than half of current U.S. farm exports to Korea on the date the FTA enters into force.

Why Korea?

Korea has the potential to be an even greater place to do business. Trade with Korea offers expanded economic opportunities for U.S. manufacturers, workers, and farmers. It is a large and growing market for U.S. exporters and a good economic and policy partner to the United States. A Free Trade Agreement gives us a framework to make Korea a better, more open place to do business.  In addition, an agreement with Korea helps further U.S. trade and policy objectives in the region.

What's in it for me?

The KORUS FTA has plenty to offer U.S. exporters, service providers and investors. Specifically, the KORUS FTA:

Levels the playing field for U.S. companies who will enjoy tariff free access into Korea once the Agreement takes full effect.

Provides new market access for U.S. consumer and industrial products such as textiles and agricultural products.

Provides unprecedented access to government procurement

Liberalizes the services sectors.

Opens the Korean market to remanufactured goods.

Protects U.S. investments in the region.

Strengthens intellectual property right protections for U.S. patents, trademarks, and trade secrets.

Improves customs facilitation

Establishes rules of origin.

Provides benefits to small and medium sized exporters.

Provides textile, apparel, footwear, leather and travel goods information

Addresses government transparency and corruption, worker rights, protection of the environment, trade capacity building and dispute settlement.

Requires important reforms of the domestic legal and business environment that are key to encouraging business development and investment.