The visit to Washington last week by new and business-minded South Korean President Lee Myung-bak may not have been front page news initially the U.S. heartland, but all U.S. businesses trading with the Asian tiger economy should take note of the results. In a nutshell, an agreement reached to re-open the Korean market to U.S. exports of beef removed one of the major roadblocks to Capitol Hill consideration of the U.S.-Korea Free Trade Agreement.
This is good news for our industry since Seoul is in the top ten of our global trading partners and U.S.-Korea trade in electrical equipment totaled almost $2 billion in 2007, with the majority of merchandise flowing from our shores to theirs. Under the Agreement, 5-8 percent tariffs on U.S. electrical goods would be eliminated, opening the way to further export growth, and already-low U.S. tariffs on Korean goods would also disappear. Additional promised benefits in the Agreement include greater transparency in the Korean regulatory and standards development processes.
The beef "fix" was not an easy decision, and final approval of the FTA is not assured given general scepticism about trade and some quibbling in a part of the U.S. auto industry, but it is a means to an end — and shows Seoul really wants the end. Although the core of the FTA deal was concluded over a year ago, the Hill will likely not start debating the deal formally until this fall. But by rolling such a huge boulder off the path now, President Lee has made final approval possible again.