USITC Makes Available Report Regarding Free Trade Agreement with South Korea

October 2001

The United States International Trade Commission has made available in Adobe Acrobat portable document format a report entitled U.S.-Korea FTA: The Economic Impact of Establishing a Free Trade Agreement (FTA) Between the United States and the Republic of Korea, USITC Pub. 3452, September 2001. This document reflects the results of an investigation requested by the United States Senate Committee on Finance.

The ITC investigation found that an FTA between the United States and South Korea would lead to significant increases in bilateral trade. The ITC has estimated this increased trade as an increase of roughly 54% in United States exports to South Korea, and 21% in imports from South Korea. While trade between the two countries already stands at approximately $69 billion per year, in specific industries an FTA could be expected to double the trade flow. These include United States imports of Korean textiles, apparel, and leather goods. Similarly, specific United States agriculture industries, including the rice, dairy, fruit and vegetable, and meat products industries could be expected to experience substantial increases.

It should be noted that no FTA negotiations are currently underway between the United States and South Korea. Furthermore, it appears unlikely that an FTA will be negotiated between the countries in the near future. This is especially true in light of the unwillingness of South Korea to open its markets to United States high-quality rice exports, recent WTO decisions concerning the Korean treatment of United States beef, and the sensitivity to increased imports felt by the United States textile industry. Nevertheless, we will continue to monitor any developments on this front and update as events warrant.