U.S., South Korea reach free-trade agreement

  • 06-Jan-2011 03:33 EST

The U.S. and South Korea have reached a deal on a free-trade pact. The automotive industry is expected to benefit from the deal, which will give U.S. companies greater access to the Korean market. The overall agreement is expected to boost U.S. exports by $11 billion and support at least 70,000 jobs, President Barack Obama said in a Dec. 4 announcement. Under the pact, each U.S. auto manufacturer may import 25,000 cars into South Korea annually as long as they meet U.S. federal safety standards, not strictly Korean standards, according to the Office of the United States Trade Representative. The U.S. will also keep 2.5% tariffs on Korean car imports for five years. South Korea will immediately cut its tariff on U.S. car imports in half from 8 to 4% and eliminate it completely in the fifth year. The U.S. can maintain its 25% truck tariff until the eighth year and phase it out by the 10th year. South Korea must eliminate its 10% U.S. truck tariff immediately. The agreement must be approved by Congress.

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