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Korus Fta

In: Business and Management

Submitted By xxxricagrlxxx
Words 1101
Pages 5
Situation

The United States-South Korea Free Trade Agreement (KORUS FTA) is a trade agreement between U.S. and South Korea. Signed on June 30, 2007 by President George W. Bush still has to be approved by Congress. This Free Trade Agreement would be the largest for South Korea and the second largest for US, after the NAFTA. As the fourteenth largest economy of the world, South Korea is the seventh largest trading partner of the United States. An agreement was reached in which it was concluded that an FTA between both countries would increase the investments industry and bilateral trade. In the proposed FTA issues like trade, investments, autos, agricultures, and financial services were included. However, there has been some dispute over the KORUS FTA (mainly about the auto and agricultural industry), which hasn’t allowed it to be finalized. U.S. debates about the non-tariffs impact South Korea can impose on the beef and automobile industry.

Recommendations:

In order for the KORUS FTA to be eligible for approval and both parties can be benefit from economic growth, an alliance, and stability, some changes need to be done. This review recommends approval to change the following key point of the agreement:

• Auto industry:

1. The United States should ensure the complete or mostly elimination of South Korea’s non-tariff barriers that are created without input from foreign automakers and forced without warning. For example, the license plate size, keyless entry systems, power window configurations, tinted windows, and bumper configuration.
2. United States should negotiate the removing of tariffs such as owners of imported vehicles have to pay a higher car insurance because their cars are placed in a higher risk classification in South Korea; making it harder for foreign automakers to sell their cars in South Korea and make any profit.
3. Also, remove…...

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