Guess what country has the second-highest GDP in Asia behind Japan? If you guessed China, guess again.
South Korea is among the fastest-growing markets in the world, and it just got a major boost that will propel its growth even higher. In March 2012, representatives from the United States and South Korea signed the U.S.-Korea Free Trade Agreement (KORUS).
The agreement instantly opened a powerful market that was previously a challenging — and expensive — one to navigate. “This is a gold standard agreement because it’s so good for our companies,” says Tami Overby, president of the U.S.-Korea Business Council and vice president for Asia at the U.S. Chamber of Commerce.
Just two decades ago, South Korea was closed to trade from other countries. As it began to open, tariffs were so high they prohibited most organizations from doing business there. “Things like popcorn had a 600 percent tariff on them,” Overby says.
Opportunity is waiting. “The KORUS agreement levels the playing field for small businesses,” Overby says. “If you’ve got a good product or service, you’re going to find a willing market of educated, sophisticated buyers in South Korea.”
Overby sees opportunities in several sectors but notes that American products are very competitive in processed foods, agriculture and consumer goods. To find out if your products and services are duty-free, visit export.gov and search the FTA Tariff Tool or visit ustr.gov/uskoreafta. You can also contact Tami Overby at the U.S. Chamber of Commerce at firstname.lastname@example.org.
Young, Hip, Plugged In
South Korea is a country dominated by young, technology-savvy urbanites.
- #1 Ranked the most app-crazed country in the world by Google
- 11th most internet-connected country in the world
- 98% of people ages 25 to 34 have graduated from high school
- 63% have higher-education degrees
Source: CIA World Factbook and Organization for Economic Cooperation and Development
The U.S.-Korea free-trade agreement requires the two signatory countries to eliminate 95 percent of tariffs on industrial and consumer goods within five years. All sectors include a large percentage of products that are now duty-free. See the chart below to see when 100 percent of products within sectors will be duty-free.
Source: U.S. International Trade Commission and Office of the United States Trade Representative
Now 100 Percent Duty-Free
- Agricultural Equipment
- Construction Equipment
- Footwear, Leather and Travel Goods
- Aircraft and Parts
- Scientific Equipment
- Consumer Goods
- Building Products
- Electronics, Instrumentation and Information Technology Products
- Infrastructure and Machinery
- Lumber and Wood
- Medical Equipment
- Metals and Ores
- Shipping and Transportation Equipment
South Korea is a stunning example of how a combination of trade, education and technology can skyrocket a country’s place in the world. In the 1960s, the country had a GDP per capita of only $100. Today, it’s $32,100.
Source: U.S. Department of Commerce