U.S. exports are to increase by $11 billion USD with an announced massive trade pact with South Korea, by the United States of America President Obama. Obama has stated that he has a goal of increasing and doubling U.S. trade exports over the next 5 years.
This announcement comes at a time when tensions between North Korea and South Korea have sparked revelations where 4 South Koreans have been confirmed dead on South Korean soil by North Korean artillery on Yeonpyeong island. Not only this, but an incident in which involved the sinking of the South Korean ROKS Cheonan, on the 17th of April 210 which the North have denied involvement. However tensions have between the nations have been at heightening levels.
The pact between the countries is said to be supporting 70,000 American jobs. While South Korean exports to the United States remain at 2.5%, exports to South Korea are to be lowered by half from 8% to 4% and within 5 years the tax between both countries are to be eliminated in full thus creating a free-trade agreement between both countries.
Obama has stated that this deal is a “win-win” for both the United States and South Korea. The deal still has to be ratified by Congress.
If the pact is ratified then U.S. manufacturers are to have a free open market towards South Korea as goods will be cheaper to ship into the country to then essentially sell at lower price or high profit. In the same way, South Korea benefits in the same way as they’ll be able to ship goods cheaper than ever before into America, thus enabling the lowering of prices and then the increasing in competitiveness.
Obama has further stated that even though there have been heightening tensions between the two Korea’s, South Korea remains an ally and this definitely shows the strengthening of it.