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Blog Entries from April 28, 2011

Trading with South Korea

Congressman Jim McDermott with Commerce Secretary Gary Locke, South Korea – April 26, 2011

Guest blog post from Congressman Jim McDermott, who is the Ranking Member of the Subcommittee on Trade, and represents the city of Seattle, WA in the U.S. House of Representatives. He wrote this post while on the CODEL trip to Korea with Secretary Locke.

The U.S.-South Korea Trade Agreement is something that is good for both countries.  For South Korea, this is an opportunity to solidify their position as a world economic power by establishing a relationship with the United States. They are in a situation where they are surrounded by China, North Korea and Japan. They are a group of 50 million people who since the Korean War have gone from absolute devastation to a solid economic performer – a country that can deal with the United States on an equal basis.

When we began trading with an impoverished South Korea, we opened our doors and lowered our tariffs to the point where they paid almost nothing to export to the United States. Simultaneously, we paid enormous tariffs when we exported to South Korea – tariffs that are still in effect.

I’ll give you an example: a bottle of wine that would cost $13 in Seattle would cost $68 here in Seoul because of the tariffs. With the new trade agreement, those tariffs will come down and we will have Washington State wine sold here in Korea. Instead of drinking French, Italian, Spanish and Argentinean wines, they will be drinking Washington wine. That’s just one example of how we stand to benefit from an economic standpoint.

Secretary Locke and Members of Congress Tour Pantech and Meet with U.S. Businesses in Korea

On the second day of the CODEL trip to Korea, Secretary Locke and the congressional delegation visited Pantech, one of the largest mobile phone makers in South Korea, to see firsthand how the U.S.-South Korea Trade Agreement will help American and South Korean businesses and workers in today’s global manufacturing and supply chain. 

Currently, Pantech imports about half a billion dollars worth of U.S. products annually, including chipsets from Qualcomm (San Diego, Calif.) and Gorilla Glass from Corning Inc. (Corning, New York).  Gorilla Glass is manufactured in Harrodsburg, Kentucky and is exported around the world for use in smart phones, tablets and other mobile devices and has applications across a large range of industries.  In addition, nearly 60 percent of Pantech’s production equipment is made by U.S. companies.

With the approval and implementation of the U.S.-South Korea agreement, Pantech is expected to quadruple its purchase of U.S. products by 2015, while Corning will see existing tariffs on Gorilla Glass eliminated immediately upon implementation of the agreement. Corning, utilizing these benefits, will gain market share in South Korea’s growing mobile-device market by enhancing its competitiveness vis-à-vis other manufacturers in the region.  Corning is also investing $180 million to expand its factory in Harrodsburg in order to meet the growing demands of its customers in Asia, including South Korea.  Earlier in the day, Locke met with his South Korean counterpart, the Minister of Knowledge Economy Choi Joong-Kyung, to discuss KORUS and the cooperative relationship between the U.S. Department of Commerce and the Ministry of Knowledge Economy.

AMCHAM Korea Welcomes Secretary Locke to Seoul

Amy Jackson, President of the American Chamber of Commerce in Korea, Hosts Secretary Locke During a Luncheon in Seoul, Korea.

Guest blog post by Amy Jackson, President of the American Chamber of Commerce in Korea.

The American Chamber of Commerce in Korea (AMCHAM Korea) was very pleased to welcome Secretary of Commerce Gary Locke and his delegation of four distinguished Members of Congress to Korea this week.  Their visit symbolizes the strong ties that underline the U.S.-Korea bilateral relationship – and also the expectation that the U.S.-Korea Free Trade Agreement (KORUS FTA) will soon be taken up by the legislatures in both countries for a vote.

AMCHAM Korea is the oldest and largest foreign business association in Korea.  We are a fully private organization, and we have around 2,000 individual members coming from about 1,000 companies that span all sectors of the economy – aerospace, automotive, agriculture, consumer products, financial services, healthcare, education, professional services, and many more.   Our member companies are big and small and employee hundreds of thousands of U.S. workers throughout the United States. 

Our key message to Secretary Locke and his delegation was that early ratification of the KORUS FTA is essential for the continued success of U.S. companies in the $1 trillion dollar Korean economy.  Our members emphasized that they compete head-to-head with European companies here, and once the Korea-EU FTA goes into effect on July 1, European companies will have a significant cost advantage over their U.S. competitors.  In addition, companies in the Congressional districts of the Members who accompanied the Secretary noted that they are already looking at changes in their supply chains as a result of the Korea-EU and KORUS FTAs.  If KORUS goes into effect soon, this could mean significant increase in sourcing from U.S. suppliers.