CARGO ALERT: Renegotiation of the U.S.- Korea Free Trade Agreement
The United States and South Korea have come to an understanding on revisions to the U.S.- Korea Free Trade Agreement (KORUS).
The U.S. trade deficit with South Korea grew from $16.6 billion in 2012, when KORUS was implemented, to $28.3 billion in 2015. It has been declining since 2015.
Administration officials confirmed that the U.S. and Korea will make multiple changes to the agreement intended to reduce the U.S. trade deficit with Korea. The current U.S. trade deficit with South Korea is $22.9 billion (about 80 percent of this gap is in automobiles and auto parts).
Under the revised agreement South Korea doubles its current quota of certain imported U.S. vehicles from the current 25,000 to 50,000 per year. It also extends the current 25 percent U.S. tariff on pickup trucks from South Korea from 2021 to 2041.
The countries agreed to an import quota on steel products from South Korea to the U.S. set at roughly 70% of the average of current steel exports from South Korea to the U.S. An official explained that the annual quota, “will be a product specific quota equivalent to 70 percent of average annual export volume for these steel products, based on a three-year average from 2015-2017.”
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