Late last year, as reported on World Trade 100 in Reducing Barriers to Trade, President Obama signed three new Free Trade Agreements with Colombia, Panama, and South Korea to eliminate tariffs and other barriers to U.S. exports, expand trade between the US and the respective country, and promote economic growth.
Columbia is the third largest economy in South and Central America and Panama is one of the fastest growing economies in the region, but it is the South Korea agreement that is of the most interest, especially considering the amount of electronics being imported by the US each year. And South Korea, which is the 15th largest economy in the world, does the most manufacturing in Information and Communication Technology (ICT) of all the OECD countries (Source: OECD ICT Outlook 2010) — almost 50%. And while 50% of global trade in manufactured ICT products takes place outside the OECD countries, dominated primarily by China, the fact that 50% takes place in OECD countries means that global buyers of ICT will soon have access to tariff-free trade on ICT products from the country producing almost 25% of the goods! (See the tariff schedules on the USTR page that reduces the tariffs on many products to 0.)
Under the FTA, nearly 95 percent of bilateral trade in consumer and industrial products will become duty-free within five years of the FTA’s entry into force, with most remaining tariffs eliminated within 10 years. And the almost unrestricted entry into the huge consumer market offered by South Korea will also benefit producers of ICT products, as demand there is almost as high as in Japan and parts of China. This is promising for globalizing ICT companies.