The U.S-South Korea Free Trade Agreement

People began to talk about The U.S - South Korea Free Trade Agreement 5 years ago in the Bush administration. However, the final agreement was finally signed last month by President Lee and President Obama. It is interesting to think about why it took so many years.

In my opinion, the automobile industry played a significant role here. As we know, the Korean automobile manufactures is growing so fast for the last several years. So the Union of the U.S automobile employees is worrying about losing more jobs. That is why they hired so many people in D.C for lobbying.

However, the agreement was approved anyway. It is because this free trade agreement is also good for the United States. As a trade partner and a military alliance, the South Korea imports billions of products from America. When the agreement finally gets effective, the reduction of Korean tariffs will add $10 billion to $12 billion to the U.S every year. So for the greater good, the United States government decided to pass the agreement. In the agreement, the Koreans promise to cut the tariff of automobiles from 8% to 4% immediately. At the same time, they will remove the tariff of that in 5 years. As a return, the United States will remove the current 2.5% automobile tariff in 5 years too. This agreement will benefit both the Koreans and the Americans.

Moreover, this free trade agreement will build a model for America to sign similar agreements with other Asian countries. It is quite a remarkable achievement for the U.S government.