US-Korea agreement protects jobs

South Korea’s import tariffs on manufactured goods average 11.2 percent and are 49 percent on agricultural products. Since the US-Korea Free Trade Agreement was signed in 2007, those tariffs have cost American businesses more than $13.2 billion. But if Congress approves a new trade agreement when it returns from recess, about 80 percent of South Korea’s tariffs on US imports will disappear immediately. More than 95 percent will be gone within five years.

The Obama administration estimates that the US-Korea trade agreement will create or support 70,000 American jobs in manufacturing and almost 30,000 American jobs in agriculture. The Senate Finance Subcommittee on Trade has claimed that it could create 280,000 US jobs.

In addition, US exports to South Korea may increase by as much as $11 billion upon full implementation, and US GDP by as much as $12 billion, according to the US International Trade Commission.

New England’s textile and apparel industry will share in that growth. In fact, it has already benefited handsomely from South Korea’s growing consumer market. Textile and apparel exports from Massachusetts companies to Korea more than tripled in value between 2006 and 2010 - from $5 million to $15.2 million.

The trade agreement will eliminate 72 percent of textile and apparel tariffs immediately upon effect and remove all of them within five years.

South Korean textile firms pose no competitive threat to the United States, and both have shrunken substantially in the face of competition from low-wage countries.

Nonetheless, to guard against an unforeseen import surge from South Korea, the trade agreement provides textile-specific safeguards that allow the United States to reapply all its textile and apparel tariffs for up to four years, if South Korea is found to have violated the agreement.