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Remarks at American Chamber of Commerce in Korea, Seoul, Korea

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AS PREPARED FOR DELIVERY
Wednesday, April 28, 2011
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Commerce Secretary Gary Locke
Remarks at American Chamber of Commerce in Korea, Seoul, Korea

Good afternoon, everyone. Thank you for that kind introduction.

This has already been quite a week for me and for my colleagues from Congress.

All of them are here this afternoon.

  • Representatives Jim McDermott and Dave Reichert from my home state of Washington;
  • And two members of the New York congressional delegation, Joseph Crowley and Charlie Rangel.

All four of these men have helped create prosperity for more Americans through trade with Korea and indeed the entire world.  All four have strong ties with the Korean American community in their home states.

Of course, one of these men in particular is very well known to the people of Korea:  Charlie Rangel.

Congressmen Rangel first came to Korea in 1950 as part of the Army's second infantry division.  He went on to earn a Purple Heart, a Bronze Star and a Presidential Unit Citation for the bravery he showed fighting for the freedom of the Korean people.  

Since then, the Korean people have had no greater friend in Washington D.C. than Charlie Rangel, who has done so much over the years to expand cultural, diplomatic and economic ties between our countries.  

Congressmen Rangel, thank you so much for your service.

Today, Korea is one of the United States’ closest allies in the world.

Our soldiers have served side-by-side to tackle common security challenges on the Korean Peninsula and in Afghanistan and Iraq.

We’ve got scientists working side-by-side to develop technologies to combat climate change.

And our businesses are collaborating, innovating and trading together like never before.  This week, our delegation from D.C. is getting to see this up close.

Earlier this morning, I visited Pantech, one of Korea’s largest mobile phone makers, and a major buyer of U.S. technology.  

More than 60 percent of the production equipment at Pantech is made by U.S. companies, and you’ll find plenty of American- made components in their phones, like scratch resistant gorilla glass from Corning and microchips from Qualcomm.  

And tomorrow, we’re going to Seoul National University Hospital to see a demonstration of Varian Medical Systems’ advanced radiotherapy technology.  

This equipment is manufactured in California and sold globally, and it’s helping Korean and American doctors fight cancer and save lives.

This is the type of cooperation we’ll be seeing a lot more of once we achieve final passage of the U.S.-Korea trade agreement.

Both of these relationships – between Varian and Seoul Hospital and between Pantech and its American partners – will be strengthened by the U.S.-Korea trade agreement that reduces and eliminates tariffs and makes regulations and approval processes:

  • Faster;
  • More transparent; and
  • More predictable.

That's going to mean more goods and services being sold.  And it’s going to mean more jobs in America and here in Korea.

So today, I’d like to talk briefly about this agreement and why it will be so beneficial for both our countries.

The U.S.-Korea trade pact is the United States’ most significant trade agreement in 17 years. And it’s estimated to increase American economic output more than our last nine trade deals combined.  

Meanwhile, Korean companies and their workers will have freer access to the United States, which is the world’s largest consumer market.

It is also critically important for U.S. companies to be active in Korea, because Korea is one of the most dynamic economies in the entire world.

This country's GDP has nearly doubled since 1998.  

And in the aftermath of the global financial crisis, few weathered the storm better than Korea.  

Korea has long been an export powerhouse but it has evolved from a low-cost manufacturing economy, to a research and design driven model that now boasts instantly recognizable global brands like LG, Samsung and Hyundai.

When Korea hosted the G-20 this past November, it was just one more sign that this is a country that has arrived as a global economic power.

None of this is coincidental.  

Korea’s rise has been sparked by smart government policies that unlocked the ingenuity of the Korean people, and that made investments in education and innovation a national priority.  

And I’d like to congratulate President Lee and the other Korean government and business leaders who have been such capable stewards of the Korean economy over the past few years.

Even without a formal trade agreement, the United States and Korea have become critical trading partners.  

Korea is already the seventh largest export market for the U.S., while America is the second biggest export market for Korea.  

And the U.S.-Korea trade deal will help fully unlock the potential of this relationship, and not just in economic terms.

This agreement is yet another sign that the U.S.-Korea strategic relationship is strong and growing.  

Our countries have developed a true partnership anchored by our common values.

That's good for both our people and indeed, for the entire world.  We have the ability to help achieve peace and prosperity in this region and across the globe.  

But of course, this agreement isn’t just about symbolism.  It will make a tangible difference in the ability of American and Korean companies’ to compete in the global economy.

For U.S. companies, workers, farmers, and ranchers the overall benefits will be substantial, and in many cases, they will be immediate.   

As soon as the U.S.-Korea agreement takes effect, tariffs and other measures that restrict American producers’ access to this market will begin to fall.  

U.S. producers will be selling more auto parts, crops and countless other goods to the 12th largest economy in the world – and that can add critical fuel to our economic recovery – which in turn will benefit Korean companies and workers.

Under the U.S.-Korea trade pact:

  • More than 60 percent of U.S. agricultural export sales to South Korea will become duty free immediately;
  • Over 95 percent of U.S. exports of consumer and industrial products to South Korea would become duty free within five years, and most remaining tariffs would be eliminated within 10 years; and
  • South Korea’s $580 billion services market would be opened to American companies in sectors ranging from delivery and telecommunications services to education and health care services.

This deal also includes strong environmental and labor standards that will benefit workers in America as well as Korea.

And this deal is going to help move us closer to President Obama's National Export Initiative goal of doubling U.S. exports by the end of 2014.

I think it's important to note the urgency the Obama administration feels to get this agreement through Congress.  

America used to be Korea's biggest importer, but in the last decade, our share of Korea's import market for goods dropped from 21 percent to just 9 percent.

The fact is that the global economy is becoming a lot more competitive, and that’s a good thing.  

But we want to ensure everyone is competing on a level playing field, and that's exactly what this agreement is going to do.

The benefits of this agreement will be equally significant for the Korean people and business community.

The Korea Institute for International Economic Policy estimates that exports to the United States will rise by 12 percent per year under this agreement.  

Korea will secure:

  • Preferential access to the U.S. market;
  • Provide its companies with a tariff edge over global competitors.  

Over time, that marginal tariff preference can lead to a significant increase in market share for Korean companies selling into the U.S.

By more closely linking Korea with the U.S. economy, the agreement will enable Korea to become more competitive and help move it closer to its goal of becoming a financial center of northeast Asia.

Korean consumers will also benefit immensely, enjoying lower prices for daily commodities and special purchases.  

This deal also includes rigorous intellectual property protections that will result in increased protection for Korean and American inventors and content producers.

One of the most significant benefits of the agreement will be increased investments in Korea’s relatively underdeveloped services industries: logistics, financial and medical services to name a few.

These investments will lead to high quality and more balanced growth and will bring benefits to both Korean companies and consumers.

Meanwhile, the deal will also open up the Korean market to more world-class technology from the U.S. – technology that can help spur Korean domestic innovation and create more demand from Korean consumers and sales by Korean companies.

Of course, realizing the benefits of this agreement will depend not just on getting it passed through the U.S. Congress.  The actual implementation is what really counts.

And I know that some U.S. and Korean companies still have concerns about some issues.

But if a company has concerns that any provision in the trade agreement is not being adhered to, there are robust mechanisms in the agreement to ensure these concerns are addressed.

We’ve got a joint committee of officials from various Korean and U.S. government agencies that will review the implementation of the U.S.-Korea trade agreement on an annual basis.

We have also established a robust dispute settlement mechanism, with special expedited procedures for any dispute regarding the automotive sector.

We are ready and willing to listen to concerns from companies, workers and others to make sure this agreement works as it should.

To AMCHAM’s members, we need your engagement.  You are our eyes and ears.  You are the ones that will know how this agreement is working in the real world on the ground.

Here in Seoul, we’ve got our U.S. Foreign Commercial Service office offering American companies a direct line to the U.S. Department of Commerce headquarters in Washington, DC.  They’ll be happy to help you with any issues you have.

Now, it's no secret that this trade deal has faced opposition in both America and Korea from some who are concerned about its effects on particular industries and particular workers.

President Obama heard these concerns and instructed his negotiators to address them.

As a result, our December 2010 supplementary agreement with Korea levels the playing field for American automakers and workers, and now enjoys their strong support.

Meanwhile, Korea benefitted from the December agreement in the areas of:

  • Intra-company transfer visas;
  • Pharmaceutical patent procedures; and
  • Agricultural tariffs.

I am absolutely confident that the U.S.-Korea trade deal is going to be good for the companies and workers of both countries.

And I think it's important that all of you – as leaders in business and in the communities where you operate – are forceful advocates for this agreement and for expanded trade in general.

You know the benefits of trade. More than most, you have seen how trade can:

  • create better jobs and growth  
  • speed the delivery of transformative ideas and technology  
  • and hasten democracy and the spread of freedom

For some 200 years, the United States’ competitive advantage has been our openness to the best ideas, the best products, and the best businesses, regardless of where they come from.

For Korea, its decades of explosive growth have been sustained by trading with countries all over the world.

We need to keep moving down that path of openness and trade cooperation.  This agreement keeps us going in the right direction, and I encourage all of you to get behind its passage with everything you've got.

Thank you. And may the strong economic, strategic and cultural ties developed between our two great nations and peoples over the last 60 years continue to flourish for another 60 years.