Korean FTAs in Effect
Effectuation of the Korea–US FTA
Korea–US Free Trade Agreement (FTA): As of 2010, the United States is one of the most important trading partners of Korea. It is our second largest export market accounting for 10.7% of all exports, with its GDP that is 14 times larger than ours. Korea, with its FTA negotiations with the United States and its ratio of dependence on foreign trade reaching up to 87.9%, will expand its economic scale and create jobs by increasing foreign trade and investment; strengthen its social safety net for the underprivileged by increasing financial income; and develop its economic system to maximize the effectiveness of globalization.
1. Significance of the Agreement
- Reliably secures the world’s largest market (trade cost reduction including customs cost and mitigation of trade conflict)
- Increases production, employment, trade and foreign direct investment (FDI) (preoccupying the US market, improving the business environment and increasing industrial efficiency)
- Strengthens the economic and social system (establishment of a global standard, dramatic improvement of the service sector and the quality of life of citizens) (lower prices, wider choices and better consumer benefits)
- Expands foreign investment (mitigation of security risk and enhancement of international credit standing)
2. Importance of the US Market
- The United States is the world’s largest economy, producing 23.3% of the entire global GDP (as of 2010, IMF), and Korea has developed its economy by exporting our products to the United States for the past 40 years.
- The United States is the leader of the global business and technology trend. Competition and cooperation with the United States, which has the world’s best institutions and leads the global trend of information knowledge, means that we step ahead in competition and cooperation with the whole world as well as preoccupy the world’s information knowledge market ahead of our competitors to maintain and expand our share.
- Holding the largest share of the world’s best technology, the United States is the so-called “test market,” where the competitiveness of each country is judged. When the competitiveness of our products is recognized in the country by selling our goods and services at a reasonable price, we can gain grounds in Europe, Asia, and other markets. Turning away from the US market makes the upgrade of our economy impossible.