The United States and South Korea settled on a free trade agreement (FTA) on December 3, which is to be ratified in both countries' bureaucratic processes before coming into force.
Although the two sides had signed a free trade agreement in June 2007, ratification could not be realized due to some controversial elements.
According to US President Barack Obama, the agreement will boost exports to South Korea, increasing the amount to $11 billion and supporting at least 70,000 local American jobs. "American manufacturers of cars and trucks will gain more access to the Korean market and a level playing field to take advantage of that access," he specifically pointed out.
"This agreement is meaningful in that it reflects both countries' interests in a balanced way and lays the foundation for a reciprocal win-win," South Korean President Lee Myung-bak said in a statement.
Both leaders called for local authorities to ratify the agreement, which is expected to enter into force in the summer of 2010.
If ratified, the agreement would reportedly eliminate tariffs on over 95 percent of industrial and consumer goods within five years.
South Korea will let the United States keep a 2.5 percent tariff on South Korean-built cars for five more years, press sources said, adding that the new supplement agreement allows 25,000 cars per US automaker to qualify for entry into the South Korean market based on US safety standards, four times the 2007 level.
It also allows the United States to keep a 25 percent tariff on trucks until the eighth year, instead of beginning to reduce it in the first year. The United States will still have to eliminate the duty in 10 years.
South Korea is no longer required to eliminate immediately its eight percent tariff on US auto imports, but will reduce it to four percent for four years before eliminating it.