Recently, the United States and South Korean governments announced that their free trade agreement will officially be entered into force on March 15. The agreement to slash tariffs and other trade barriers was signed in 2007. But it was delayed for years by changes in governments in the two countries, the global financial crisis and American worries over an imbalance in auto trade. Seoul eventually compromised and addressed those concerns.
For the plastics industry, the implementation means that immediately on March 15, all export tariffs on molds will be eliminated and 62% of the resins exported to South Korea will also become duty free. The implementation also means that in three years all export tariffs on machinery will be eliminated and in five years nearly 100 percent of tariffs on plastic products will be removed. (See link below for details.)
William R. Carteaux, president and CEO of SPI: The Plastics Industry Trade Association issued the following statement concerning the implementation of this important trade agreement.
"SPI staff and our grassroots network of members worked countless hours and made hundreds of Capitol Hill visits in support of the U.S. -South Korean trade agreement. We worked so hard on this because trade expansion is a critical component of America's economic recovery and the U.S. International Trade Commission has estimated that this agreement alone will generate more than 90,000 jobs. In October, SPI Senior Vice President, Government and Industry Affairs Jon Kurrle and I were in attendance at the White House as President Obama formally signed the South Korea, Colombia and Panama free-trade agreements into law. Today the entire plastics industry can celebrate the announcement that the positive impacts on our industry will begin to be felt March 15.
“I am proud to say that the U.S.-South Korea agreement is America's biggest since the 1994 North American Free Trade Agreement with Canada and Mexico. South Korea is the world’s tenth largest economy, and the third largest economy in Asia. South Korea is the 10th largest export market for U.S. plastics. Since 2000, plastics exports to South Korea have increased by 44 percent. In 2010, our country enjoyed a trade surplus with South Korea of $118 million.
“Fundamentally, this agreement is about making trade fair. Its passage creates a more level playing field for the U.S. plastics industry and increases our competitiveness in South Korea. The U.S. market is largely open to imports from around the world, but other countries continue to place steep tariffs on our exports. This agreement eliminates the barriers U.S. exporters have faced in the South Korean market.
“I want to stress that agreements like this are particularly important for America's small and mid-sized companies – small shops that are often shut out of foreign markets by high tariffs and other barriers. More than 250,000 U.S. companies are exporters, and 97% of them are small and medium-sized businesses. Together, they generate nearly one-third of all U.S. merchandise exports. “