On March 15, 2012, the United States Trade Representative (USTR) announced that the U.S.- Korea Free Trade Agreement (KORUS FTA) entered into force in the U.S. for goods entered, or withdrawn from warehouse for consumption, on or after March 15, 2012. The agreement is said to be the U.S.' most commercially significant free trade agreement (FTA) in almost twenty years. The U.S. International Trade Commission (ITC) estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone will add $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea.
Under the FTA, almost 80% of U.S. exports to Korea of consumer and industrial products became duty free on March 15, 2012, and nearly 95% of bilateral trade in consumer and industrial products will become duty free within five years of March 15, 2012. Most remaining tariffs will be eliminated within 10 years.
For agricultural products, KORUS FTA eliminated or will phase out tariffs and quotas on a broad range of products, with almost two-thirds (by value) of Korea's agriculture imports from the United States becoming duty free upon entry into force.
For services, the FTA will provide meaningful market access commitments that extend across virtually all major service sectors, including greater and more secure access for international delivery services and the opening up of the Korean market for foreign legal consulting services.
In the financial services area, the FTA will increase access to the Korean market and ensure greater transparency and fair treatment for U.S. suppliers of financial services. The FTA will address nontariff barriers in a wide range of sectors and includes strong provisions on competition policy, labor and environment, and transparency and regulatory due process.