Korea-U.S. FTA Revision Negotiation

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Extension of Tariff Elimination on Freight Automobile Exports up to 20 Years·Exemption from Tariffs on Steel under Article 232

 

The negotiations for the revision of the Korea-U.S. FTA have been concluded under a cloud of great concern among the entire nation. Although the final procedures are still under way, it has been resolved in effect. The United States has decided to exempt
Korea from tariffs on steel and aluminum products under Article 232 of the Trade Expansion Act, and Korea has decided to extend tariff elimination on freight automobile exports and to lower the automobile safety and environmental standards.
The two countries agreed to exempt Korea from tariffs on steel products under Article 232 of the Trade Expansion Act. Meanwhile, Korea’s steel exports to the United States were set to a quota of 74% compared to the previous year, which corresponds to an average export volume of 3.83 million tons for the period from 2015 to 2017.
The Ministry of Trade & Industry (MOTIE) estimated that the uncertainty of Korean companies was eliminated by securing 74% of exports to the USA last year without additional 25% tariffs, with the early exemption of Korea.
Boards, one of the nation’s main export items, in particular, secured a quota of 111 % compared to the previous year, yet the quota on steel pipes, such as oil country tubular goods (OCTG), was confirmed at 1,040,000 tons.
Accordingly, MOTIE expected a significant decrease compared to last year’s exports of 203 million tons and stated that it would plan to draw up measures to reduce damages including diversification of exports and boosting domestic demand. Talks on steel products are scheduled to commence on May 1.
South Korea also pushed on its concerns through the amendment of the agreement in the field of investor-state dispute settlement (ISDS) and trade remedies through a revised agreement. In regard to the ISDS, it incorporates factors related to the prevention of investors’ abusive litigations and the government’s legitimate policy mandates and has decided to ensure transparency in trade remedies.
It also announced that the uncertainty has been removed by revising the rules of origin standards for some textile items and achieving a position on the further opening of the agricultural and livestock market, a core sensitive area of the country, and the use of U.S.-made auto parts.
On the other hand, instead of obtaining steel, agricultural products, and ISDS, it was decided to step back in the automotive field. Korea has extended the tariff elimination on freight automobile exports to the USA from 2021, the tenth year, up to 20 years until 2041.
In addition, provided that a company complies with American automobile safety standards up to 50,000 units per year, it will be regarded as compliant with the safety standards of Korea, and the detailed test procedures and methods of gasoline vehicles using exhaust gas will be acknowledged alongside.

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Staying Ahead of the Competition in the Robot Industry through Cooperation and Service Robots

https://korean-machinery.com///inquiryThe Korean government made a full-fledged start to advance the robot industry. According to the “New Government’s Industrial Policy Direction” announced in December last year, the Ministry of Trade, Industry and Energy (MOTIE) recently held the Intelligent Robot Industry Development Strategy Conference at the Korea Institute for Robot Industry Advancement to discuss development plans for the robot industry.
While the world’s leading companies are competitively launching high-tech robots equipped with artificial intelligence, and the market for cooperative robots design to work with humans in industrial fields, is expected to grow rapidly from US$200 million in 2016 to JPY$ 3.24 billion in 2022. The United States and Japan invested US$22.5 million and JP¥ 29.41 billion in 2016, respectively. With the growing demand for service robots to improve the quality of life due to the increase of the elderly population and the demand for personalized service, the International Federation of Robotics (IFR) expects an average annual growth rate of 10% with US$ 14.9 billion in 2020.
On the other hand, the growth of the Korean robot industry is centered on large companies manufacturing automobiles and electronic appliances. This resulted in more than three times the difference in manufacture robot production with KRW 2.67 trillion and service robot production with KRW 770.4 billion in 2016, thus posing a concern that it will be fixed as manufactureroriented.
Therefore, the Ministry of Trade, Industry and Energy (MOTIE) announced a plan in the conference to create leading markets and support growth centered on cooperative and service robots, which are expected to lead the global market in the future.
First, the companies equipped with smart factory construction and root companies will be provided with cooperative robots to improve the productivity of small and medium-sized manufacturers suffering from the burden with minimum wage and manpower shortage. In addition, the commercialization of service robots is planned for the five promising areas including smart home, medical, rehabilitation, disaster and safety, unmanned transportation, and agricultural robots.
In order to strengthen the innovation capability, MOTIE will concentrate its support on research and development of the three major robot parts including operation, sensing, and control, for the robot-mounted platform and the CNC control machine standard model, with a plan to specialize the research and support organizations by dividing them into three regions. This growth support measures include preparing cooperative robots safety guidelines, improving regulations that may impede the proliferation of robots, and expanding new jobs related to robot service.
Moon Seung-Wook, Director-General of MOTIE, urges the industry, academia, and research field to work together to contribute to the global competitiveness of the robot industry and to the creation of jobs for youths. The government also emphasized efforts to create tangible outcome through speedy promotion of development strategy regarding the intelligent robot industry.

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Korean trade chief confident of $1tn trade this year

https://korean-machinery.com///inquirySouth Korea’s gross domestic product (GDP) in the second quarter ended June 30 grew 0.6 percent against the previous three-month period, losing steam from the surprising pickup of 1.1 percent in the first quarter as overall manufacturing activity stayed subdued except for semiconductors and petrochemicals.

According to second-quarter preliminary data recently released by the Bank of Korea, the country’s GDP totaled 386.6 trillion won ($344.3 billion) in the April-June period. The figure was unchanged from the headline number released in late July.

Against a year-ago period, the GDP grew 2.7 percent in the second quarter, slowing from 2.9 percent gain in the first quarter.

The string of data released recently – the biggest jump in inflation in more than five years, still-robust exports and slowed growth – underscored instability in the recovery pace.

Overseas shipment in the second quarter contracted 2.9 percent on quarter, reversing from 2.1 percent gain in the previous quarter as automobile shipment to China sharply dropped due to Beijing’s retaliation against Seoul’s installation of a powerful U.S antimissile battery. The figure was revised up slightly from 3.0 percent fall in July.

Imports also shrank by 1.0 percent due to reduced crude oil import. Manufacturing output fell 0.3 percent on quarter. The domestic demand showed improvement amid expectations for the new government’s promise to increase income and hiring.

 

 

Private consumption rose 1.0 percent on quarter in the biggest gain in six quarters. Facilities investment surged 5.2 percent on quarter and 17.3 percent on year due largely to expansion in chipmaking facility.

Construction investment also edged up 0.3 percent, compared with 6.8 percent gain in the first quarter.

Gross corporate investment rate was 31.5 percent, up from 30.5 percent in the first quarter and highest since the second quarter of 2012.

By sector, agriculture and fisheries output fell 1.1 percent, manufacturing 0.3 percent, and construction 1.3 percent. Service output accelerated by 0.8 percent, reflecting a slight recovery in consumer demand.

Gross national income in the second quarter after seasonal adjustment shrank 0.6 percent from the previous quarter to 401.6 trillion won due to a sharp rise in dividend payment made by local firms to offshore investors. The final figure was revised down from 403.5 trillion won in July.

The share of gross saving against GDP slightly declined to 35.7 percent from 36.9 percent in the first quarter as private expenditure grew 2.3 percent, faster than an increase of 0.4 percent in disposable income.

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Korea Discussed Trade Issues and Measures to Facilitate Trade and Investments with China

The Ministry of Trade, Industry and Energy held the 2nd Korea-China Trade Cooperation Meeting with the Ministry of Commerce of China in Seoul on April 22, 2014.

The general director-level meeting is held on a semi-annual basis, in accordance with the Korea-China MOU for Expansion of Economic and Trade Cooperation, which was signed by the Ministry of Trade, Industry and Energy of Korea and the Ministry of Commerce of China in June 2013 during the Korean President’s visit to China.

Lee Seong-ho, Deputy Director General of Trade Cooperation Division led the Korean delegation including eight ministries such as the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Oceans and Fisheries, and the Ministry of Health & Welfare, while the Chinese team including members from related organizations was led by Chen Zhou, General Director of Department of Asian Affairs, Ministry of Commerce of the PRC.

Both parties reviewed trade issues that had been raised at the 1st meeting held in Beijing on September 26, 2013, and discussed some new trade issues.

Korea raised a number of issues, including refunds of the Chinese VAT applied to Chinese exports of steel, and the unreasonable hygienic standards and quarantine procedures applied to imports of agricultural products and foods. China raised the issue of the trade imbalance between the two countries.

The two countries also discussed ways to promote cooperation in trade and investments. Issues discussed included the facilitation of largescale investment programs of Korean companies in China, support for the advancement of Korean companies into western and central China, and effective attraction of investments by Chinese companies in Korea, under the circumstances where foreign investments of China are rising.

The Ministry of Trade, Industry and Energy intends to work with China continuously in order to reach agreements on the diverse issues raised at this meeting, and make efforts to further develop trade relations between the two countries by forming a more concrete plan on the cooperation programs for this year, which was discussed.

 
 
 
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