After years of delay, on October 12, 2011, Congress ratified the United States-Korea Free Trade Agreement (KORUS FTA), the largest American free trade deal since NAFTA was signed in 1993. The following covers the basic information compliance professionals will need to familiarize themselves with to utilize the new agreement once it comes into force (expected [...]
After years of delay, on October 12, 2011, Congress ratified the United States-Korea Free Trade Agreement (KORUS FTA), the largest American free trade deal since NAFTA was signed in 1993.
The following covers the basic information compliance professionals will need to familiarize themselves with to utilize the new agreement once it comes into force (expected to be January 1, 2012):
• Rules of origin (in which you will see tariff shifts and RVC calculations based on the build-up and build-down methodologies)
• Tariff elimination schedule (See Schedule 2-B at the end)
There will be no specific Certificate or Origin for Korea, but here are the required data elements:
(a) the name of the certifying person, including as necessary contact or other identifying information;
(b) the importer of the good (if known);
(c) the exporter of the good (if different from the producer);
(d) the producer of the good (if known);
(e) tariff classification under the Harmonized System and a description of the good;
(f) information demonstrating that the good is originating;
(g) date of the certification; and
(h) in the case of a blanket certification issued as set out in paragraph 4(b), the period that the certification covers.
Importers will be able to self-certify or to rely on a written or electronic certification from the exporter or producer. Exporters may rely on the producer’s reasonable written or electronic certification or on the exporter’s knowledge that the goods are originating.
Largest U.S. free trade deal since NAFTA expected to be approved this month On Monday, President Barack Obama sent Congress legislation for free-trade agreements with South Korea, Colombia and Panama, ending a prolonged wait for business supporters that spanned more than four years and two presidencies. Of the three agreements, the United States-Korea Free Trade [...]
Largest U.S. free trade deal since NAFTA expected to be approved this month
On Monday, President Barack Obama sent Congress legislation for free-trade agreements with South Korea, Colombia and Panama, ending a prolonged wait for business supporters that spanned more than four years and two presidencies.
Of the three agreements, the United States-Korea Free Trade Agreement (KORUS FTA) is by far the most commercially significant, with a projected boost for U.S. exports of as much as $11 billion in the first year in which it’s in full effect, according to the U.S. International Trade Commission.
South Korea has an economy at close to $1 trillion, and already is the United States’ seventh largest goods trading partner. Administration officials estimate that America’s economic output will grow more from the South Korea deal than from the United States’ last nine trade agreements combined.
The U.S. International Trade Commission estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion to $12 billion to annual U.S. GDP and around $10 billion to annual merchandise exports to Korea.
Under the FTA, nearly 95 percent of bilateral trade in consumer and industrial products would become duty free within three years of the date the FTA enters into force, and most remaining tariffs would be eliminated within 10 years.
For agricultural products, the FTA would immediately eliminate or 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.
The KORUS FTA would also provide U.S. suppliers with greater access to the Korean government procurement market.
The bills for the free trade accords are covered by so-called fast-track rules requiring Congress to vote within 90 legislative days, limiting debate and amendments before an up-or-down vote. Leaders of both the House and Senate have indicated that they will be given “top priority” and acted on by the end of the month.
