In March 2012, the United States and the Republic of Korea (ROK) signed a comprehensive free-trade agreement (KORUS FTA). At that time, it was considered the most significant deal of its kind that Washington had signed in nearly two decades.
As the first U.S. trade deal of with a North Asian country, the KORUS FTA is being held as the model for other trade agreements under negotiation with other U.S. partners in Asia-Pacific and reflects Washington’s unwavering commitment to the region.
During the Asia-Pacific Economic Cooperation (APEC) summit held in Beijing in November 2014, U.S. President Barack Obama and ROK President Park Guen-hye reaffirmed their pledge to strengthen the strategic partnership between their two countries and discussed steps to boost security in the Korean Peninsula.
Although the KORUS FTA has unmistakably improved the existing business climate for Korean and American companies, it also opened up several new sectors for investment, particularly in information and communications technology (ICT), clean energy, as well as in science and technology.
Three years on, the KORUS FTA is said to account for between $10 billion and $12 billion of the yearly gross domestic product (GDP) of the United States, and valued at around $10 billion of the annual goods exports of South Korea.
Through more extensive cooperation with the United States– in security, economic, and even cultural spheres – South Korea is certain it will further consolidate its status as an important regional and global power.
Spearheading efforts to expand relations between American and South Korean businesses has been the American Chamber of Commerce (AMCHAM), currently led by Amy Jackson, a former U.S. government trade representative for Japan and Korea
“When the KORUS FTA was launched, the AMCHAM had been already a firm supporter and in fact, an advocate of the agreement,” recalled Jackson.
Two years after, AMCHAM South Korea has devoted a lot time to publicizing how the two sides have benefited from the sweeping trade agreement.
“Some times after FTAs are implemented, there is not enough reporting on the positives. So, we are working on a follow-up since the agreement’s implementation. We are seeing that trade flows are up in areas where there were tariff reductions under the FTA. Flow areas have increased more for Korea thus far, but perhaps by March of next year, that will change,” Jackson also said.
South Korea is determined to become a hub for global trade that will rival the busiest ports in Europe and North America. Should South Korea finalize a free-trade deal with economic powerhouses, China and Japan, its FTA coverage will amount to 83 percent of the world’s GDP.
Beyond South Korea’s conglomerates, or chaebols, small and medium enterprises are contributing to the country’s economic growth, thanks to the efforts of President Park, who has helped SMEs grow from domestic players to exporters.
With more investment opportunities brought about by the FTA, U.S. companies have also seen the benefit of partnering with South Korean SMEs and integrating these new players into the global supply chain.
In the service sector, the FTA has provided increased access both ways.
Staffed by 450 lawyers, Bae Kim & Lee LLC has built a reputation for delivering swift service and tailored advice to scores of businesses and investors in every industry in Korea and China.
Partner Kevin Kim, who has had twenty-eight years of experience as a lawyer, was appointed the firm’s head of international arbitration at BKL – the very first such practice in the country. As a pioneer in the field, Kim was also appointed vice president of the International Court of Arbitration at the International Chamber of Commerce.
Aside from being a leader in international arbitration in Korea and Asia, BKL was also the first Korean law firm to open an office in China.
In Korea’s automotive industry, exports to the United States have increased sharply since the implementation of the KORUS FTA. Also, there has also been a growth in the sales of American cars, which were a rare sight in the country until recently due to the restrictive tariffs.
Since it began business in 1972, auto parts supplier Hanil E-Hwa Co. has opened fourteen overseas subsidiaries and built up an impressive clientele.
A listed company in the Korea Stock Exchange, Hanil E-Hwa manufactures door trim, bumpers, consoles, package trays, pillar trims, screen accessories, and seats for various carmakers, including global giants such as Hyundai, Kia, Volkswagen, Ford, and Nissan.
Chairman Yang Seok Ryu has overseen the company’s impressive expansion as he adopted the latest technology and maintained his passion to make world-class products for its partners.
With easier access to markets, including the United States, Ryu hopes to make Hanil E-Hwa a leader in the global automotive industry.