Minnesota, USA –December 28, 2011 – Since 2007, there was a struggle to implement a Free Trade Agreement (FTA) between S Korea and the U.S.; however, in October of this year the countries came upon an agreement, which would launch in early 2012. But we should not be rubbing our hands together too much –as for the U.S. side – because S Korea is also trying to get an agreement with Japan and China. Would that mean that Korea would be using this ‘low tariff’ or ‘tariff free’ opportunity to flood the U.S. market with goods, but not take any of U.S. goods in return
Although it is unlikely that S Korea would not receive goods from the U.S., it is likely that it would be minimal compared to what the U.S. is receiving. It is easily seen by the current car market that the U.S. is importing far more Korean-made cars than Korea is importing American-made cars. If you walk the streets or get in a car in Korea, you will notice mainly Korean-made such as Kia, Hyundai, or even Daewoo. Would the FTA increase the amount of American cars on the street or would it simply increase the amount of Korean cars on American streets
Many would believe that S Korea has the advantage in the agreement; however, we must remember that each economy affects the world economy, which in turn affects the U.S. economy. Even though the U.S. may –or may not be – the current largest economy, it depends highly on other economies to supply it with the goods it needs. As much as it is a pity that the U.S. will not directly benefit as much, it is necessary to remember that it does benefit somehow even if it is not the American people who see it.
But is S Korea relying too much on exports It is highly influenced by other markets since it relies on other markets to buy its goods, shares, and such; if Korea would like to not be as volatile to outside changes, it would need to find a way to provide growth inside of its nation. Presidents in the past attempted to do this by government loans for small businesses and more, but obviously it needs to find another strategy.
What is to come of this FTA Is it needed or is the relationship between the U.S. and Korea already set in stone