Next Steps for the U.S.-Korea Economic Partnership
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This past weekend, U.S. Chamber President and CEO Tom Donohue and fellow Chamber staff embarked on a week-long trip to Asia to meet with business leaders and government officials in South Korea, China, and Japan.
It’s really quite simple: Asia generates a third of global GDP and purchases a quarter of American exports. U.S. trade with East Asia alone reached nearly $1 trillion in 2010. It is an essential market for U.S. companies. Success here is vital to America’s prosperity; Asia is home to some of our most important strategic and commercial allies. There are still many more opportunities in that part of the world—if we seize them.
In many ways, Korea represents all that is possible in the region. Korea is our 7th largest trading partner, and the commercial relationship between our two countries has never been better. Thanks to the KORUS FTA entered into force in March, 95% of bilateral trade will be duty free in five years. It will boost exports by billions of dollars annually for both sides. It will support tens of thousands of new jobs in both countries. KORUS will make American companies more competitive by leveling the playing field, reducing red tape, increasing transparency, and protecting intellectual property rights.
But the purpose of our trip was not simply to celebrate the historic KORUS FTA. We went to build on it, to ensure its success in generating more business, more growth, and more jobs in both countries. To help achieve these goals, the U.S. Chamber and the U.S.-Korea Business Council created the KORUS Growth Steering Committee, which has three purposes: educate the U.S. business community on how to take advantage of KORUS, compile and share KORUS success stories, and help facilitate discussions to address problems that may arise from KORUS—or other issues in the bilateral trading relationship.
Many of our discussions with Korean officials centered on how to leverage KORUS to the benefit of small- and medium-size enterprises (SMEs). Speaking to the American Chamber of Commerce in Korea, Donohue said:
The U.S. Chamber is committed to working closely with the Korea Chamber of Commerce and Industry—and other Korean business organizations—to create programs that will help foster the growth of SMEs in both countries.
Why such a strong focus on SMEs? Because they are the engines of economic growth and critical in creating jobs. In the United States, they account for three-quarters of all new jobs. And 96% of the Chamber’s members happen to fall into this category.
KORUS was not our only piece of business in Seoul. Donohue built support for the ongoing Trans-Pacific Partnership (TPP) multilateral trade negotiations, saying that "it makes abundant sense for Korea to consider joining the TPP at an appropriate time."
South Korea continues to emerge not only as an economic leader, but also a strong geopolitical player. In our world of interconnected geopolitics and economics, the United States will increasingly rely on South Korea’s partnership to confront challenges in global trade.