Korus FTA Free Essay Example, 2500 words

The researcher states that South Korea and United States signed a free trade agreement (like NAFTA) between them on June 30, 2007. A revised and renegotiated version was again signed in December 2010. However this free trade agreement is still to be ratified by the National Assembly of South Korea and United States Congress. It has therefore still not been implemented. Once the agreement is ratified and implemented it will lead to elimination of 95% tariffs on goods between US and South Korea in five years. This free trade agreement is the second largest trade agreement of United States after the NAFTA. This free trade agreement will give broader access to US car makers in the South Korean market. This agreement is therefore supported by the Ford Motor Company and United Auto workers. Automobiles are a large component of the trade deficit that United States has with South Korea. The KORUS FTA will lead to abolition of taxes imposed in South Korean on large cars produced in United St ates of America. South Korea will also have to reduce 40% of the tariffs on the beef imported from United States over a period of fifteen years. We will write a custom essay sample on Korus FTA or any topic specifically for you Only $17.96 $11.86/page These act as the biggest barrier for United States exports. The elimination of these tariffs after the Free trade agreement is implemented will give a major boost to the United States exports and industry. United States is the largest economy in the world. South Korea is the eleventh largest economy in the world. The KORUS FTA will create a free trade zone between these two large economies.