New US-Korea agreement improves trade deficit

September 3, 2018 – The US Trade Representative (USTR) today posted news on its website that an improved Korea-US (KORUS) agreement, originally proposed in March, now delivers more reciprocal trade outcomes benefiting US workers, exporters, and businesses.

KORUS

The USTR announcement reports that it has achieved steps to improve the large trade deficit in industrial goods and to address KORUS implementation concerns that have hindered US export growth. The announcement records the following steps:

US Truck Tariffs: Korea will extend the phase out of the 25% US tariff on trucks until 2041, or a total of 30 years following the implementation of the KORUS FTA in 2012. (currently scheduled to phase out by 2021).

Growing US Auto Exports: Exports of US motor vehicles to Korea will be improved through the following steps:

Greater Access for US Exports: Korea will double the number of US automobile exports, to 50,000 cars per manufacturer per year that can meet US safety standards (in lieu of Korean standards) and enter the Korean market without further modification.
Harmonization of Testing Requirements: US gasoline engine vehicle exports will be able to show compliance with Korea’s emission standards using the same tests they conduct to show compliance with US regulations, without additional or duplicative testing for the Korean market.
Recognition of US Standards for Auto Parts: Korea will recognize US standards for auto parts necessary to service U.S. vehicles, and reduce labeling burdens for parts.
Improvements to CAFE Standards: Korea will expand the amount of “eco-credits” available to help meet fuel economy and greenhouse gas requirements under the regulations currently in force, while also ensuring that fuel economy targets in future regulations will be set taking US regulations into account and will continue to include more lenient targets for small volume manufacturers.

Customs Improvement: Korea will address long-standing concerns with onerous and costly verification procedures through agreement on principles for conducting verification of origin of exports under KORUS and establish a working group to monitor and address future issues that arise.

Pharmaceutical Reimbursements: Within 2018, Korea will amend its Premium Pricing Policy for Global Innovative Drugs to make it consistent with Korea’s commitments under KORUS to ensure non-discriminatory and fair treatment for US pharmaceutical exports.
https://USTR.gov

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