Trade Agreement Home • Jobs • New Opportunities • Meet American Businesses • Key Facts
The United States is highly competitive in services trade – providing information and communications technology services, wholesale and retail distribution, express delivery services, energy and environmental services, professional services (such as legal, accounting, architecture, and engineering services), and financial services to customers all over the world. America is consistently able to export more services than we import every year – despite sometimes-significant trade barriers abroad. The United States already has very few barriers to the import of services – so when we strike trade agreements, a huge benefit comes from requiring our trading partners to provide Americans with equivalent access to their services markets.
South Korea is a major market in this area – the world’s 8th largest importer of services – and South Korean imports of services have grown 40 percent faster than the world over the past decade. Total U.S. sales of private commercial services to South Korea through cross-border and affiliate channels is estimated to have exceeded $24 billion in 2009 – new opportunities in South Korea’s expanding market have great potential to translate into additional export supported jobs here at home. With an estimated services market of $580 billion in 2010, every 1 percent increase in U.S. market share results in approximately $5.8 billion in revenue for U.S. companies.
KEY ELEMENTS:
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The agreement requires South Korea to match the level of openness provided by the United States in a host of sectors, ranging from energy and environmental services to financial services and distribution. The agreement provides greater access for international delivery services and charts a course for future reform of South Korea’s postal system with respect to delivery services. The agreement’s provisions on cross-border services, telecommunications, and electronic commerce offer particular benefits to the information and communications technology service sector – an area where the United States excels – by working together to ease the flow of trade in services and products delivered over telecommunications networks. These provisions benefit the many U.S. small and medium-sized enterprises that are on the forefront of innovation, but do not have the resources to establish an office in every market they serve. Similarly, the agreement discourages South Korea from setting technology standards or other requirements that would give South Korean producers unfair advantages over American exporters, preserving the ability of American suppliers to get innovative products and services into the market.
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South Korea will also open its legal services market to foreign legal consultants, permit free association with South Korean lawyers, and allow U.S. law firms to offer a broader range of services over time. Similar steps will be taken for accounting services. These and many other steps will create new opportunities for U.S. firms to supply services in South Korea and support additional jobs at home.
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The agreement guarantees U.S. service suppliers the right to compete with South Korean services providers on a level playing field, by prohibiting discriminatory treatment of U.S. suppliers in the legal or regulatory arenas. As with all U.S. trade agreements, the agreement also respects the right of both the American and South Korean governments to regulate and introduce new regulations, with protections for situations where regulators may need to take actions to protect key domestic interests such as financial stability or the environment, or to comply with other key domestic laws.
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The agreement provides comprehensive coverage of the South Korean services market, addresses all modes of supply – whether services are delivered cross-border or through a direct commercial presence in South Korea – and will apply to new and innovative services that may develop as markets evolve. Any limitations on market access in services are clearly defined, which provides legal certainty for U.S. firms seeking to supply services to the South Korean market.
