North American Free Trade Agreement Certificate of Origin 2021

In today’s rapidly globalizing world, the main topics free trade has emerged as the most controversial issues up for debate. While economic theory predicts that freer trade will finally make everyone in society happier, trends in recent decades have demostrated that the removing trade barriers not merely creates big winners, but makes a lot of people across the world worse off. In the United States, the struggle between winners and losers inside the globalization game has of late manifested itself inside the debate on the South Korea-US Free Trade Agreement (KORUS FTA). While it was concluded on April 1, 2007, recent administrations haven’t submitted the KORUS FTA for congressional review. We will now explore the KORUS FTA and its particular supposed affect on American exports as a way to explain this administrational refusal to submit the agreement to Congress.

The KORUS FTA is among the most economically significant bilateral free trade agreement that this United States has concluded since signing the North American Free Trade Agreement (NAFTA) in 1994. The KORUS FTA will open South Korea – a nation that represents America’s seventh-largest trading partner, $82 billion in bilateral trade in 2007, as well as a growing market of 49 million consumers – on the majority of American services and goods. According on the strictures in the KORUS FTA, Korea and also the US will likely be permitted four years to eliminate tariffs on over 90% of bilateral trade in consumer and industrial products and almost 2/3 of American agricultural exports to Korea can be duty-free immediately. Furthermore, the agreement will address numerous non-tariff barriers and increase transparency inside the South Korean regulatory process. According to a quote by the US International Trade Commission, opening the Korean goods market alone will add $10-12 billion to annual US GDP and can lead to an increase in better-paying jobs for American workers (export.com).

Given the opportunity economic benefits from the KORUS FTA, presidential wariness of seeking congressional approval seems unfounded. However, the agreement won’t have unwavering support from the American Congress due to number of powerful interest groups who oppose the FTA. Most significantly, the American automobile and beef industries in conjunction with influential US labor unions staunchly oppose the agreement. US automakers reason that while the American market will offered to Korean vehicles, South Korean regulations discriminate against imports of US autos. US automakers sold lower than 7000 vehicles in South Korea in 2008, a figure signifying less than 1% on the available market. In comparison, South Korean carmakers sold greater than 53,000 vehicles within the US in October 2009 alone. According on the AFL-CIO, over three quarters in the $13.4 billion US trade deficit with South Korea is at autos. This discrepancy is mainly responsible for figures such as US Trade Representative Ron Kirk to urge South Korea to “level the playing field” by reducing tariffs on US automobiles ahead of the agreement are going to be considered (Bloomberg). American beef exporters, who face similarly damaging tariffs while entering the Korean market, share the grievances of American automakers and US labor unions fear that opening US markets without Korean reciprocation will produce large job losses during these two industries.

Despite opposition by these powerful groups, many republicans together with certain democrats in Congress are urging the president to end existing concerns and quickly approve the KORUS FTA. These men as well as their supporters insist which the agreement can create thousands of well-paying jobs for Americans and can open the tastes US exporters to some substantial new market (Reuters). They argue the opportunity given to US exporters is simply too great for being ignored and, now, this time may be used up. In October 2009, South Korea signed a free-trade pact together with the European Union that awaits ratification as well as the Korean government is engaging in negotiations of one other free trade agreement with Japan and China. Companies for example Citigroup Inc. and ACE Ltd. fear that this recently signed EU-Korea trade accord may give their competitors the benefit in cracking Korean markets (Bloomberg).

Although riddled with all the imperfections inherent to free trade agreements, the KORUS FTA represents an significant chance for American exporters. Furthermore, the KORUS FTA is regarded as an important method to strengthen American ties towards the Asian market, counterbalance South Korea’s growing trade ties with China, and maybe even restore the American position as Korea’s preeminent trade partner. Finally, the agreement will not simply boost economic ties between two nations, but is additionally strategically very important to the US in shaping future Asian policies. Failure could mean a devastating blow with a key American alliance in the increasingly important region. (The Heritage Foundation). If President Obama has the ability to garner the political capital essential to push the KORUS FTA through Congress, it has the possible to send American exports to new heights. However, doing this will require strength, persistence, and a lot compromise.