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FTA with South Korea Rallies US Carmakers

A long topic for debate for US and South Korean politicians, a free trade agreement (FTA) between the two countries is entering the final leg, as talks on the matter are ongoing in Seoul, the South Korean capital.

The agreement between the two sides, called KORUS FTA, has been signed by the two countries in 2007, but it is still not ratified by them. Apparently, the talks held Tuesday between US Trade Representative Ron Kirk and South Korean Trade Minister Kim Jong-hoon were inconclusive, with a new set of discussions set for Thursday.

The FTA will allow for the elimination of Korea's 8 percent tax on US passenger vehicle imports, as well as the elimination of US taxes on Korean imported vehicles. This would translate into gold for American manufacturers.

The current form of the deal however still displeases the carmakers. Chrysler for instance says that while it has “supported every free trade agreement negotiated by the US Government,” it “cannot support this agreement in its current form.“

Meaning that Chrysler, and most likely others two, would like to enter the South Korean market without taxes attached, but would rather not see the competition of Korean carmakers grow in the US should tax elimination go both ways.

“The United States is already open to Korean vehicles and that's why the US-Korea Free Trade Agreement must be used to fully and irreversibly open Korea to American-made vehicles,”
says Chrysler.

South Korea looks like a gold mine when looked at from US shores. Currently the country's seventh largest trading partner according to the Congressional Research Service, Korea's economy could grow by an estimated $10 billion over the next few years.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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