Key points of KORUS FTA
The following are the major aspects of the supplementary alterations on auto trade and other issues in the South Korea-U.S. free trade agreement.
1. Automotive safety standards
South Korea agreed to soften its auto safety standards for U.S.-made cars. In the previous deal, there was an automatic two-year grace period before U.S. auto manufacturers had to meet any new Korean regulations related to self-certification for safety standards.
The supplemental agreement allows for 25,000 cars per U.S. automaker - or almost four times the number allowed in the 2007 agreement -- to be imported into Korea if they meet U.S. safety standards.
2. Automotive emission standards
South Korea will exempt low-volume importers from its ultra low emissions vehicle (ULEV) standard that is scheduled to take effect from 2015. Under the new standard, South Korea will apply tougher efficiency criteria for vehicles, requiring vehicles to reduce their greenhouse gas emissions to 140 grams per kilometer.
Under the supplemental agreement, all U.S. autos will be considered compliant with new Korean environmental standards on fuel economy and greenhouse gas emissions, developed since the 2007 agreement, if they achieve 119 percent of the targets in these regulations.
3. Automotive tariffs elimination
Under the 2007 agreement, all tariffs on automotives would have been immediately eliminated gradually within three years after the implementation of the accord.
The new agreement allows the U.S. to keep its 2.5 percent tariff on autos in place until the fifth year. At the same time, South Korea will immediately cut its tariff on U.S. auto imports in half (from 8 percent to 4 percent), and fully eliminate the tariff in the fifth year.
4. Tariffs on pick-up trucks
In 2007, the U.S. agreed to phase out its 25 percent tariff on South Korean trucks in 10 years.
But the new agreement allows the U.S. to maintain its tariff until the eighth year and then phase it out by the tenth year.
5. Tariffs on electric cars
Under the 2007 agreement, the U.S. and South Korea would have eliminated tariffs on electric cars and plug-in hybrids by 10 years after the implementation of the accord. The new agreement calls for South Korea to immediately reduce its electric car tariffs from 8 percent to 4 percent, and both countries will then phase out their respective tariffs by the fifth year.
6. Special safeguard for automotive industry
The previous agreement had no provision on safeguard measures specific to the auto industry. Under the 2010 supplemental agreement, both sides agreed to introduce safeguard measures for motor vehicles.
7. Tariffs on American pork
Under the previous agreement, South Korea would have eliminated tariffs on American pork by 2013. The new agreement allows South Korea to extend the period to phase out the tariffs until 2015.
8. Visas for S. Korean workers in U.S.
Under the new agreement, validity of visas for South Korean workers dispatched to offices in the U.S. will be extended to five years from the current one year.