Last year, I made a bold prediction: that “October 12, 2011” would always be known as “October 12, 2011”. Why is that date significant? Because it’s the day that Congress passed the South Korea-US (KORUS) free trade agreement (FTA). KORUS FTA was the first major trade policy issue that WCIT took on in its rebirth last summer, and we were pleased to see it passed because of its potential to significantly increase exports from our state and to add thousands of jobs for Washington residents.
Today – October 12, 2012 – is therefore the one year anniversary of this milestone, and you’re probably asking the question, “What have the impacts been so far?”
And, of course, it’s hard to tell. Technically, the free trade agreement didn’t actually go into effect until March of this year, and it will take five years for all of the tariff reductions and other non-tariff market barrier reductions to be fully implemented. So far this year, Washington exports to South Korea are up 17% year-to-date (August 31 being the most recent data) over the same time period last year: $2.7 billion vs. $2.3 billion. And there are some great individual stories: thanks to KORUS, the tariff on Washington cherries went from 24 percent to zero overnight; in the very first cherry season without import duties, cherry sales to Korea nearly doubled, jumping 86 percent to $23 million.
While we don’t know the larger impacts of KORUS yet, we’ll probably learn a lot more even over the next six months or so. And there’s reason to be optimistic. Governor Gregoire just completed a trade mission to Korea, making her one of the first governors to visit the country since the signing of the FTA. As I’ve always said, at the end of the day trade is like any other business; it’s about relationships, and the first ones to seal the deal get to reap the benefits.
Expect to hear a lot more about KORUS implementation here at the State of Trade blog over the next year. And in the meantime, celebrate October 12 as a major day in trade policy history.
