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Blog Category: South Korea

U.S. Secretary of Commerce Penny Pritzker Leads Business Development Mission to Japan and South Korea

Home to nearly 60 percent of the world’s GDP and the fastest growing economies, the Asia-Pacific region offers a wide array of opportunities for United States businesses and workers. To further improve the U.S. economy, the Obama Administration recognizes the critical importance of strengthening its well-established trading partnerships in the region, particularly with Japan and South Korea.

With the fourth and thirteenth highest GDP respectively, Japan and South Korea are highly developed, stable markets for trade and investment. The healthcare sector in both countries is expanding quickly to meet rising demand. In Japan, there is a rapidly-aging demographic profile, with a population aged above 65 years, which will increase from 25.1 percent in 2013 to 29.2 percent by 2023. In addition, South Korea is emerging as a hub for global medical tourism by attracting and training world-renowned doctors and developing more advanced clinical trials.

To take advantage of these growing market opportunities, U.S. Secretary of Commerce Penny Pritzker will leave tomorrow for Asia to lead 20 American firms on a Business Development Mission with stops in Japan and South Korea. The business delegation includes small and big companies, such as C3 Energy, HPI, and Oregon. The mission will focus on expanding opportunities for U.S. businesses in the healthcare and energy sectors and will also look for ways to help the region develop and manage energy resources and systems, and build out power generation, transmission, and distribution.  

As the voice of business in the Administration, the U.S. Department of Commerce, plays a pivotal role in expanding market access for U.S. companies in countries around the world. Specifically on this mission, Secretary Pritzker and American businesses will meet with Japanese and South Korean business leaders in the medical device, biotechnology, regenerative medicine, energy and health IT sectors to explore opportunities for partnership and investment.

The Commerce Department is committed to creating more opportunities for American businesses to flourish both at home and abroad. During the mission, Secretary Pritzker will also focus on reinforcing trade agreements that reflect our values, such as the Trans-Pacific Partnership (TPP) and U.S.-Korea Free Trade Agreement (KORUS), that will help U.S. firms gain greater access to the Japan and South Korea markets.

This will be Secretary Pritzker’s first trade mission to Asia since taking office in June 2013 and will promote U.S. exports to Japan and South Korea by helping American companies launch or increase their business in these key markets.  The mission will make stops in Tokyo, Japan and Seoul, South Korea.

U.S.-Korea Trade Agreement Provides Opportunities for U.S. Export Businesses

Korea Trade Agreement Enters into Effect

The United States-Korea Trade Agreement (KORUS Agreement) enters into effect today, reducing tariffs on almost all U.S. industrial exports to South Korea and making it easier for U.S. exporters to successfully compete in the Korean market.

With the implementation of the KORUS Agreement, tariffs will immediately be eliminated on almost 80 percent of U.S. exports to Korea.

Tariffs will also be reduced on other industrial exports that are not made automatically duty-free—the average tariff rate on U.S. industrial exports to South Korea will be reduced from 6.2 percent to 1.1 percent. Most remaining tariffs will be eliminated within 10 years. In addition, the KORUS agreement will eliminate tariffs on nearly two-thirds of all U.S. agricultural exports to Korea. The Commerce Department’s International Trade Administration (ITA) can help exporters figure out when tariffs on their products will be reduced or eliminated (PDF).

The KORUS agreement means more trade for U.S. businesses and more jobs for American workers. The tariff reductions give U.S. exports a competitive advantage in the Korean market, creating new opportunities for companies to do business in South Korea and providing opportunities to expand the reach of their businesses.

For example:

  • Zeeland Farm Services, Inc. (ZFS) is a family-owned and operated agricultural and transportation business with over 200 employees. ZFS was able to break into the Korean market in 2008, and their annual sales revenues in exports to Korea have been around the $5 million mark. The base tariff rates on ZFS’s product categories range from three percent for cottonseed exports to eight percent for soybean meal exports. Under the KORUS agreement, all of these tariffs would immediately drop to zero, giving ZFS a competitive advantage in the Korea market.
  • iWood Eco Design is a Louisville, Kentucky-based manufacturer of custom wood-framed sunglasses. The company currently pays an eight percent tariff on its exports to Korea, Under the KORUS agreement, these sunglasses will enter the country duty-free, immediately creating cost savings for the company. Expedited customs clearance commitments in the pending trade agreement would also facilitate greater access to international delivery services.
  • Pipe Line Development Company (PLIDCO), a Cleveland, Ohio-based manufacturer of pipeline repair and maintenance fittings, currently employs approximately 100 employees. International markets, including Korea and other Asian markets, comprise 74 percent of PLIDCO’s export revenue. PLIDCO currently faces tariffs of up to eight percent on its exports to the Korea. These tariffs will be eliminated under the KORUS agreement, enabling PLIDCO to better compete with other top exporters to Korea, including those from the EU and Iran.

The KORUS agreement is also an important step toward meeting President Obama’s National Export Initiative (NEI) goal to double U.S. exports by the end of 2014. This commitment to supporting exports is one way the Commerce Department is working to support an American economy that’s built to last.