Korea Auto Exports May Top U.S. Imports Under Pact, ITC Says
Automobile imports from South Korea may increase by almost $1 billion, more than three times the gain for U.S. exports, under a free-trade agreement being considered by both nations, an independent government study concluded.
Even with revisions to the vehicle provisions negotiated by President Barack Obama, imports of vehicles and auto parts from Korea would jump $907 million under the accord, and exports increase $194 million, according to the study released today by the U.S. International Trade Commission. Korea’s pledge to end regulatory barriers may add $66 million more in U.S. exports, the agency said.
Exports to Korea would expand 54 percent compared with 11 percent for shipments from Korea, reflecting an already lopsided trading relationship, reported Bloomberg. Korea sent 561,626 passenger vehicles to the U.S. last year, while U.S. carmakers shipped 13,044 vehicles, according to the agency’s report. The U.S. auto market is also almost 10 times as big as Korea’s.
Representative Dave Camp, a Michigan Republican and chairman of the House Ways and Means Committee who requested the report, said the findings underscore the need for Congress to approve the deal.
“This report shows how effective our trade agreements can be in removing both tariff and non-tariff barriers to U.S. exports,” Camp said in a statement.
The government agency, which is independent of the Obama administration, said that exemptions from Korea environmental regulations granted by the Koreans in negotiations with Obama may help increase exports from Ford Motor Co. and U.S. carmakers.
Exports and imports of autos are lower than forecast in a 2007 report, reflecting a drop in trade between the two nations following the financial crisis in late 2008. The percentage change is in the same range, the ITC report said.
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