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Practice Areas

FTA Treatment for Goods Made in Joint Korean Industrial Complex to be Discussed

Tuesday, October 08, 2013
Sandler, Travis & Rosenberg Trade Report

According to press reports, U.S. and Korean officials will meet Nov. 4 for their first talks on whether goods produced by South Korean companies in an industrial park located in North Korea should be eligible for preferential duty treatment under the U.S.-Korea Free Trade Agreement. The neighboring countries reopened the Kaesong complex in September following a five-month shutdown prompted by diplomatic tensions, paving the way for a meeting of the Committee for Offshore Processing Zones on the Korean Peninsula established by the FTA.

The European Union’s FTA with Korea includes goods made in Kaesong and Korea is seeking similar coverage in an FTA it is negotiating with China. The U.S.-Korea FTA requires the two sides to form a committee to discuss the matter, but U.S. officials have always stressed that regardless of this committee’s findings any decision to extend duty-free treatment to goods made in Kaesong would have to be approved by Congress.

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