The U.S. and South Korea issued Nov. 13 a joint fact sheet providing the following additional details on the trade deal they announced in July. Press sources indicate that the two sides will meet in December to further discuss how to implement some of these provisions.
Tariffs
- The U.S. will apply to imports of originating goods from Korea the higher of either (1) the U.S.-Korea Free Trade Agreement or U.S. most-favored-nation tariff rate, as applicable, or (2) a “reciprocal” tariff rate of 15 percent.
- The U.S. will reduce its Section 232 tariffs on automobiles, auto parts, timber, lumber, and wood derivatives of South Korea to 15 percent. For such products with a KORUS or MFN tariff rate equal to or greater than 15 percent, no additional Section 232 tariff will apply; otherwise, the sum of the KORUS or MFN tariff and the additional Section 232 tariff will be 15 percent.
- If the U.S. imposes Section 232 tariffs on pharmaceuticals, the tariff rate on originating goods of South Korea will be no more than 15 percent.
- If the U.S. imposes Section 232 tariffs on semiconductors (including semiconductor manufacturing equipment), it intends to provide terms for such tariffs on South Korea that are no less favorable than those that may be offered in a future agreement covering a volume of semiconductor trade at least as large as Korea’s.
- The U.S. intends to remove supplemental reciprocal tariffs for certain products from South Korea, such as generic pharmaceuticals and their ingredients and chemical precursors as well as certain natural resources unavailable in the U.S.
- The U.S. will also remove reciprocal tariffs on certain aircraft and parts of South Korea.
Non-Tariff Measures
- South Korea will (1) eliminate the 50,000-unit cap on U.S.-originating vehicles compliant with Federal Motor Vehicle Safety Standards that can enter without further modifications and (2) not require additional documentation in its vehicle emissions certification process other than those documents submitted to U.S certification authorities.
- South Korea will work to address non-tariff barriers affecting trade in food and agricultural products, including by (1) ensuring that existing commitments under bilateral agreements and protocols are met, (2) streamlining the regulatory approval process for agricultural biotechnology products and resolving the backlog of U.S. applications, (3) establishing a U.S. desk dedicated to requests for U.S. horticultural products, and (4) preserving market access for U.S. meats and cheeses that use certain terms.
- South Korea commits to (1) ensure that U.S. companies are not discriminated against and do not face unnecessary barriers in terms of laws and policies concerning digital services, including network usage fees and online platform regulations, and (2) facilitate cross-border transfer of data, including for location, reinsurance, and personal data.
- The U.S. and South Korea will work together to combat all forms of forced labor globally, including by combatting the importation of goods made with forced labor.
- The U.S. and South Korea “acknowledged the need to strengthen economic and national security alignment,” including by cooperating to combat duty evasion and taking complementary actions to address unfair and non-market policies and practices, enhancing inbound investment and outbound investment regulations, and ensuring that international procurement obligations benefit those countries that have taken on the same commitments.
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