Industry Hails U.S.-Korea Deal

Chemical manufacturers are welcoming a revised free trade agreement the White House has struck with South Korea, saying the deal’s market-access provisions will help increase U.S. exports and create thousands of jobs.

“This significant achievement will allow both countries to move forward on demonstrating the critical benefits of this specific agreement and the broader commitment to a positive trade liberalization agenda,” says Andrew N. Liveris, chairman and CEO of Dow Chemical. According to Dow, the agreement will provide more than $1 million in tariff reductions for the company’s U.S.-manufactured exports to South Korea.

“I am very pleased that the U.S. and South Korea have reached agreement on a landmark trade deal that is expected to increase annual exports of American goods by up to $11 billion and support at least 70,000 American jobs,” President Barack Obama said in announcing the bilateral pact on Dec. 3.

The two nations signed a free trade agreement in 2007 under former president George W. Bush. But the deal’s ratification had been on hold in both nations because of strong opposition by some stakeholders, especially automakers and labor unions in the U.S. The modified pact eases opposition by including new provisions that should enhance the U.S. auto industry’s access to the South Korean market.

South Korea is a major market for U.S. chemical exports.

The agreement “is of particular significance for the U.S. because the increase in U.S. exports to Korea will provide jobs for thousands of American workers, just when jobs must be the most important focus of U.S. economic policy,” says Michael E. Campbell, chairman, president, and CEO of Arch Chemicals.

Currently, U.S. exports to South Korea face an average applied tariff of 11.2%, whereas the equivalent U.S. tariff on Korean exports is 3.7%. The agreement will level the playing field—nearly 95% of all bilateral trade in industrial and consumer products will become duty-free within three years.

The pact still must be approved by Congress and South Korea’s National Assembly.