Yesterday, I had the opportunity to speak about the Korea Free Trade Agreement at the Woodrow Wilson Center in Washington, D.C. As I told the distinguished group assembled there, the U.S.- Korea trade agreement -- which we call the “KORUS” agreement -- will strengthen not only our economic relationship, not only our vital strategic alliance with Korea, but also our deep human bond with the Korean people, who already see us as one of their closest friends and most loyal partners.
The U.S.-Korea economic relationship is one of the world's most vibrant, with two-way goods trade reaching nearly $88 billion in 2010. Korea is our seventh largest trading partner, and the United States is South Korea's third largest trading partner. Our alliance with Korea has expanded from its military roots to develop into one of the most vibrant and dynamic full-spectrum strategic partnerships in modern history.
Today's Korea stands shoulder-to-shoulder with us in peacekeeping and reconstruction efforts in Haiti, Afghanistan, Iraq, and Lebanon. Recent events with North Korea have reminded us that the alliance is a vital linchpin of not only the security of Korea and the United States, but also for the Asia Pacific as a whole.
Implementation of KORUS will signal to other Asia-Pacific nations our abiding presence in the region as a vital partner in its defense and development. It will underscore our commitment to prosperity and security in the Asia Pacific.
KORUS will re-establish U.S. leadership in shaping economic policy in the region and in crafting its emerging economic institutional architecture.
Of course, commercial ties are not only important for the U.S.- Korea relationship, but for America's prosperity. Now more than ever, America's ability to create jobs here at home depends on our ability to export goods and services to the world.
We are aggressively promoting U.S. exports to fulfill the President's National Export Initiative goal of doubling exports over the next five years. An increase at this level would support up to two million new jobs, helping to put the American people back to work.
KORUS presents an historic opportunity to increase exports, create jobs, and bolster the American economy.
We signed KORUS with Korea on June 30, 2007, but U.S. Congressional approval was not forthcoming at that time due to concerns about market access for U.S. car manufacturers in Korea.
The Obama Administration consulted extensively with U.S. stakeholders, including the business community, labor representatives and Congress, and reached a new agreement in December 2010 to ensure we created a level playing field for U.S. auto companies and auto workers in the Korean market.
Here are some of the changes we negotiated in December:
We agreed to encourage green technologies by immediately cutting in half Korea's tariffs on U.S. electric car imports, and eliminating both of our tariffs altogether in five years -- five years earlier than in the 2007 KORUS agreement.
We leveled the playing field and improved transparency by addressing ways Korea's system of automotive safety standards have served as barriers to U.S. exports, as well as ensured that new, imminent Korea automotive environmental regulations did not place a disproportionate burden on U.S. autos.
We agreed that Korea will immediately cut in half its tariffs on U.S. automotive exports, while our tariff on Korea's auto exports will remain in place for five years. This will give American car companies and their workers a chance to build up more business in Korea before U.S. tariffs come down.
Finally, to protect U.S. auto companies and their workers from harmful surges in imports from Korea, we agreed to a new special motor vehicle safeguard.
The 2010 deal has, according to the United Auto Workers and the U.S. automotive industry, addressed the concerns about the agreement's potential impact on the U.S. auto industry. This package is a better deal for America's auto industry and auto workers, and it is winning widespread bipartisan support.
These benefits are not limited solely to autoworkers, but also benefit others, including those in the steel sector, and other suppliers to the auto industry. We think this agreement will support additional jobs and growth in America, and that is ultimately the best security and benefit we can secure for American workers.
We are now ready to move forward.
To bring home KORUS' promise -- billions of dollars in exports and tens of thousands of jobs in America -- the President intends to submit KORUS to Congress and will work with Congress to secure its approval without delay.
Once Congress approves KORUS, and the agreement enters into force, the benefits will be tangible. The U .S. International Trade Commission estimates that America's economic output will grow more from KORUS than from our last nine trade agreements -- combined.
I want to re-emphasize the huge job-creating potential of this deal.
The tariff cuts in KORUS alone could increase exports of American goods by $10 billion to $11 billion annually, supporting tens of thousands of American jobs.
For example, last year, the United States provided almost one-third of Korea's total agricultural imports, valued at nearly $5 billions. KORUS is expected to boost agricultural exports by as much as $1.8 billion per year. It will do this by immediately eliminating duties on the majority of U.S. farm exports to Korea, and reducing or eliminating other duties over time.
KORUS guarantees U.S. service suppliers the right to compete with Korean counterparts on a level playing field in Korea's $580 billion services market. New rights include the ability to establish joint ventures or offices in Korea, liberalize some work rules and ease investment restrictions.
That's good news for U.S. service providers, including law firms, CPAs and financial institutions, and their workers, who account for 80 percent of U.S. employment.
And speaking of transparency, KORUS addresses corruption in international trade and investment and includes obligations for anti-bribery measures.
Led by Korea and other dynamic economies, the Asia Pacific is the fastest growing region in the world. But we risk losing our market share if we don't move fast to approve KORUS. Without KORUS, American exporters will be at an immediate competitive disadvantage -- American producers would still pay Korean agriculture duties averaging over 50 percent and non-agricultural duties of nearly 7 percent.
The Obama Administration is committed to pursuing an ambitious trade agenda that will help our economy grow, double exports and support good jobs for American workers. The Administration is discussing with Congressional leadership how we can work together to accomplish the President's comprehensive trade agenda this year -- including the Korea, Colombia and Panama trade agreements, Trade Adjustment Assistance for workers, the Generalized System of Preferences (GSP) and Andean Trade preference program, and permanent normal trade relations as Russia joins the WTO.
The commercial benefits of the Colombia and Panama agreements will be in our favor. Most exports from Colombia and Panama are eligible for duty-free treatment under our trade preference programs. Simply put, that means our exporters are the only ones paying tariffs. U.S. exporters have paid an estimated $3.2 billion in tariffs to Colombia since the agreement was signed in 2006 -- that's money Americans could have saved if this agreement had been approved.
We are on the brink of bringing home more job opportunities that can help working families in every corner of the country.
KORUS is more than about trade -- this agreement links our countries together to an unprecedented extent, strengthening a vital partnership in the Asia Pacific. Jobs will be created and lives improved by removing the barriers to a closer economic relationship between our two countries.