President Notifies Congress of His Intent to Sign a Free Trade Agreement with Korea
According to the Office of the U.S. Trade Representative (USTR), on April 1, 2007, the U.S. and South Korea (Korea) successfully concluded a free trade agreement (FTA).
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On April 1, 2007, the President notified Congress of his intent to sign a FTA with Korea. (Under the provisions of the Trade Act of 2002's Bipartisan Trade Promotion Authority Act of 2002 (TPA), the President is required to notify Congress at least 90 days in advance of signing an FTA with Korea.)
According to President Bush, the U.S.-Korea Free Trade Agreement (KORUS FTA) will generate export opportunities for U.S. farmers, ranchers, manufacturers, and service providers; promote economic growth and the creation of better paying jobs in the U.S.; and help American consumers save money while offering them greater choices.
After FTA is Signed, Next Step Expected to be Submission of Implementing Legislation, Etc.
Once the FTA with Korea is signed, the next step is expected to be that the President will formally submit the U.S.-Korea FTA implementing legislation package (KORUS FTA, implementing legislation, and statement of administrative action) to Congress. Under the Trade Act of 2002's TPA, Congress would then have 90 legislative days to consider the KORUS FTA implementing legislation, which cannot be amended.
If the KORUS FTA implementing legislation is passed by Congress (both House and Senate), the President would be expected to sign it into law and then subsequently issue a proclamation implementing the KORUS FTA.
Highlights of KORUS FTA
According to a summary by the USTR, the following are highlights of the KORUS FTA (partial list):
Over $1 billion of U.S. farm exports to Korea would become duty-free immediately. The KORUS FTA would create highly valuable new export opportunities for American farmers and ranchers by eliminating and phasing out tariffs and quotas on a broad range of products. Under the KORUS FTA, over $1 billion worth of U.S. farm exports to Korea would become duty-free immediately. Most remaining tariffs and quotas would be phased out over the first ten years the KORUS FTA is in force.
Nearly all consumer and industrial goods bilateral trade would become duty-free within three years. Nearly 95% of bilateral trade in consumer and industrial products would become duty-free within three years of entry into force of the KORUS FTA, with most remaining tariffs eliminated within 10 years.
Discrimination in certain auto taxes would be eliminated, special dispute settlement provision included for autos. The KORUS FTA would eliminate discrimination in engine displacement-based taxes, a significant impediment to market access in Korea. The KORUS FTA contains strong commitments to address the specific standards-related concerns raised by U.S. auto manufacturers and to create a working group to review auto-related regulations being developed as an early warning mechanism to prevent new problems from arising and to promote good regulatory practice in Korea. The KORUS FTA also contains a special enhanced dispute settlement mechanism for auto-related measures, with strong remedies to deter actions on autos that are inconsistent with the KORUS FTA.
Yarn forward rule of origin for apparel would be included. With the inclusion of the "yarn forward" rule of origin, the KORUS FTA would give apparel products from Korea preferential access to the U.S. market while supporting U.S. fabric and yarn exports and jobs. According to the USTR, textile and apparel makers in both countries would benefit from a special textile safeguard and strong customs enforcement requirements.
Expanded market access and investment opportunities would be provided for service sectors. The KORUS FTA would expand market access and investment opportunities in a number of service sectors, including telecommunications and e-commerce. The KORUS FTA would also expand market opportunities for U.S. audio-visual products.
High level standards would be provided for IPR protection and enforcement. The KORUS FTA would provide high-level standards for protection and enforcement of intellectual property rights (IPR), including trademarks, copyrights and patents, consistent with U.S. standards.
(See ITT's Online Archives or 02/10/06 news, 06021020, for BP summary of USTR notice requesting comments on an FTA with Korea. See ITT's Online Archives or 03/15/07 news, 07031525, for BP summary on a House Ways and Means Committee Trade Subcommittee hearing on the U.S.-Korea FTA.)
USTR's press release (dated 04/02/07) available at http://www.ustr.gov/Document_Library/Press_Releases/2007/April/United_States_Korea_Conclude_Historic_Trade_Agreement.html.
President's notification to Congress (FR Pub 04/03/07) available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/07-1677.pdf.