[Herald Interview] US envoy says 10-year-old KORUS free trade agreement is basis for new trade platform
U.S. Embassy Acting Deputy Chief of Mission Andrew Herrup (left) and President of the American Chamber of Commerce in Korea James Kim speak during an interview with the Korea Herald on the occasion of the 10th anniversary celebration of the KORUS FTA and reflect on its achievements and challenges. . (Park Hyun-koo/The Korea Herald)
The Korea-US Free Trade Agreement (KORUS FTA) will play a crucial role in taking bilateral trade relations to a new level through a new trading platform designed to meet the challenges arising from a rapidly changing market environment, said a senior US official in Seoul. The KORUS FTA, which celebrated its 10th anniversary this month, is the most comprehensive and demanding trade agreement in the region.
“KORUS represents a turning point in the building of the U.S.-Korea relationship since our original security alliance, a rock-solid security alliance for more than 70 years,” said Andrew Herrup, acting deputy chief of mission of the KORUS. Embassy of the United States during a joint meeting with the American Chamber of Commerce (AMCHAM) in Korea.
He said the trade relationship between Korea and the United States is now broader and moving towards business investment. The two countries “are now looking to go even further to collaborate on developing a set of norms and values that we will share in the region and more widely,” Herrup said.
Since the free trade agreement took effect in March 2012, the value of U.S. exports of goods and services to Korea has risen more than 17 percent to nearly $70 billion, according to the ministry. Trade, Industry and Energy. Korean exports to the United States jumped 70.6 percent to $95.9 billion last year.
AMCHAM Chairman and CEO James Kim cited a more than 600% increase in the number of American cars imported into South Korea as a key example of this growing business relationship. He also noted the growing popularity of beef imported from the United States. “American beef is now the number one import here in South Korea,” he added.
As for South Korea, cars and auto parts accounted for the largest volume of its exports to the United States and showed a growth of 75.5% compared to 11 years ago. U.S. beef exports to Korea have increased 249% since 2011.
Amid a rapidly changing business environment, the 10-year-old agreement now faces the need for change to bolster mutual interests, they said. This could be done by forging a new set of partnerships on a new trading platform, the US-led Indo-Pacific Economic Framework.
“This (Biden-Harris) administration is considering a worker-centered, worker-centric trade policy and is relying on KORUS to move to IPEF. This is where we will be heading for the next few years,” Herrup said.
The IPEF, widely known as the US effort to strengthen US-Asian relations to counter China’s growing economic influence in the region, has also raised concerns about the risk of South Korea choosing sides between the two economic superpowers.
Diffusing these concerns, Herrup stressed that the IPEF was not aimed at one country, but rather aimed at spreading transparency, good governance and market systems in the region.
“We will look at a variety of things: trade, supply chains, anti-corruption and taxation, cleaner energy and decarbonising industry. The nature of economic security is blended into these four pillars,” Herrup said.
On concerns about growing risks of supply disruptions, the US envoy said he saw the issue closely related to the lingering impact of COVID-19, not the war in Ukraine.
“The number one reason it’s such a big problem right now is the pandemic. The pandemic has caused disruptions in supply chains, and it wasn’t caused by the action of just one nation. So aside from the causes of broader supply chain disruptions, we need to make sure that our two countries, as well as our partners, have access to the critical minerals we need and the supplies needed for those supply chains. essential supplies that are the basis of our economies now,” said Herrup.
As the bilateral relationship progresses, AMCHAM Chairman James Kim said he sees many business opportunities in the semiconductor industry. This is why securing the chip supply chain has become much more important, he said.
Noting that South Korean companies poured $64 billion in foreign direct investment into the United States in 2020 alone, Kim said, “shows you that Korea loves America. America is a big market for Korean companies, and that’s just one side of the other.
“South Korea is a huge base for things that require semiconductors, and three of our largest member companies using the semiconductor industry – Qualcomm, Applied Materials, and Lam Research – are here in Korea. They want make big investments in Korea because they realize they are creating a very big market,” he said. Lam Research, a semiconductor equipment maker, is set to open its research and development center in Yongin, Gyeonggi Province on April 26.
As the country awaits the start of the Yoon Suk-yeol administration in May, AMCHAM and the US Embassy said they will continue to work closely with the new government to deepen bilateral economic cooperation. .
Having met the president-elect before the presidential election, Kim believes Yoon will be a close friend to the United States.
“We talked about things like taxes, deregulation, and really helping to make Korea a regional headquarters for multinational companies, which is something a lot of American companies are already trying to do more of. So I look at him as someone who is going to be very pro-business, very close to America,” Kim said.
Herrup arrived in Seoul in August last year after two years in Washington as deputy director of the Office of Southern African Affairs. Prior to that, from 2016 to 2019, he served as Deputy Chief of Mission at the United States Embassy in Lilongwe, Malawi.
Kim has led AMCHAM Korea since 2014 and was previously CEO of GM Korea.
By Hong Yoo ([email protected])