Winners and Losers of the EU-Korea FTA: The EU vs. America
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Just three weeks have passed since Korea’s free trade agreement with the European Union entered into force, and the numbers are staggering. Between July 1 and July 13, exports from the European Union to Korea increased by 16%, while Korean exports to the European Union have increased by more than 17%, according to the Korea Customs Service (KCS).
Who are some of the winners and losers?
- European exporters who are now enjoying much lower tariff rates in Korea than U.S. exporters, as duties of products in key sectors, such as chemicals, machinery, medical equipment, aerospace equipment, dairy, wine, spirits, and processed foods have been eliminated immediately or significantly reduced.
- European medical equipment manufacturers who now have their products enter Korea duty-free while U.S. exporters still face an average tariff of 4.7% until the KORUS FTA is passed.
- European aerospace exporters who now enjoy a lowered tariff of 0.3% while U.S. aerospace companies still have to slap a 3.5% tax on their exports to Korea.
- European wine makers who get duty-free access to Korea and European whiskey makers who will pay no tarrifs within three years. At the same time, U.S. wine and whiskey makers face a stiff tariff of 15-20% putting them at a significant disadvantage. The Chileans took over the wine market in Korea when the Chile-Korea FTA passed, and it won’t be long before European winemakers also make headway over U.S. wine.
- Korean consumers and importers who can now enjoy EU-produced goods and services at a more competitive price than before July 1.
- Americans. Every day that we wait to move forward with the U.S.-Korea FTA, American workers, manufacturers, farmers, and services providers risk losing customers and business partners in Korea to competitors who are moving swiftly to take advantage of the important new benefits and opportunities available through the EU-Korea FTA.
These compelling numbers show us that the time for action is now. You can do your part by joining the “KORUS” of voices calling on Congress to approve the U.S.-Korea FTA at the earliest possible time. Help us send 20,000 letters within 20 days in support of this job-creating, market-opening agreement increasingly critical to the global competitiveness of U.S. workers and businesses.