US-Korea Free Trade Agreement

Definition

The US-Korea Free Trade Agreement (KORUS FTA) is a comprehensive trade agreement between the United States and South Korea that aims to eliminate trade barriers and enhance economic cooperation between the two countries. By reducing tariffs and opening markets, this agreement promotes increased trade, investment, and economic integration, reflecting broader trends in international trade agreements that seek to strengthen economic ties and promote free market principles.

5 Must Know Facts For Your Next Test

1. The KORUS FTA was signed in 2011 and came into effect in 2012, marking a significant step in US-South Korea relations.
2. The agreement eliminates or reduces tariffs on a wide range of goods, benefiting sectors such as agriculture, manufacturing, and services.
3. KORUS FTA includes provisions for intellectual property protection, environmental standards, and labor rights to promote fair competition.
4. The agreement is expected to increase US exports to South Korea by over $10 billion annually while supporting American jobs.
5. The KORUS FTA has undergone renegotiation since its inception, with adjustments made to address concerns from both nations regarding trade imbalances.

Review Questions

• What are the main objectives of the US-Korea Free Trade Agreement, and how do they relate to international economic integration?
  • The main objectives of the US-Korea Free Trade Agreement are to eliminate tariffs, reduce trade barriers, and enhance economic cooperation between the United States and South Korea. These goals align with the concept of international economic integration by fostering closer ties between economies, promoting free trade, and creating a more interconnected global market. By facilitating greater trade flows and investment opportunities, the KORUS FTA exemplifies how bilateral agreements can contribute to broader economic integration efforts.
• Discuss the impact of tariff reductions under the KORUS FTA on specific sectors within both the US and South Korean economies.
  • Tariff reductions under the KORUS FTA have had a significant impact on various sectors within both economies. In the United States, agricultural exports such as beef, pork, and dairy products have seen increased market access in South Korea due to lower tariffs. Conversely, South Korean industries like automotive manufacturing have benefited from reduced barriers to exporting vehicles to the US. This mutual tariff elimination encourages competitive pricing and innovation while providing consumers with a wider variety of products at lower prices.
• Evaluate the role of intellectual property provisions in the US-Korea Free Trade Agreement and their significance for both nations' economies.
  • The inclusion of intellectual property provisions in the US-Korea Free Trade Agreement plays a crucial role in protecting innovations and fostering an environment conducive to creativity for both nations' economies. These provisions help ensure that creators and businesses have robust legal protections for their inventions, trademarks, and copyrights. By strengthening intellectual property rights enforcement, both countries can benefit from enhanced investment in research and development. This creates an atmosphere where companies feel secure in introducing new products and technologies, driving economic growth and competitiveness in an increasingly globalized market.

Related terms

Tariffs: Taxes imposed on imported goods, which can raise prices and limit trade by making foreign products less competitive.

Bilateral Trade Agreement: A trade agreement between two countries aimed at enhancing trade relations and reducing barriers to commerce.

Trade Liberalization: The process of reducing restrictions on international trade, including tariffs and quotas, to encourage free trade and market access.