The U.S. and South Korea free-trade agreement signed today is good news for Indiana farmers and manufacturers, economists and international trade experts say.
Midwest farmers should see significant markets open for beef and other livestock products as well as for various crops.
Annual U.S. exports to South Korea likely will rise 30 to 50 percent in the next few years from the current $32 billion, said Gary Hufbauer, senior fellow at the Institute for International Economics in Washington, D.C.
The agreement so favors U.S. farmers, Hufbauer said, that South Korean growers already are protesting. But the South Korean government is firmly behind the deal, he added.
While Korean manufacturers also will benefit from the agreement, Hufbauer thinks the U.S. got the better part of the deal.
The upshot is that the U.S. is likely to export more manufactured goods to South Korea than South Korea will export to the U.S.
One concern is that the Big Three car companies could see sales hurt by lower import taxes on imported sport-utility vehicles.
“Koreans aren’t big suppliers of trucks now, but with this new trade agreement, the door is open,” Hufbauer said.
Hufbauer also said pharmaceutical suppliers like Eli Lilly and Co. and the entertainment industries are keenly interested in how South Korea will enforce intellectual property rights.
“The terms with respect to generic drugs is a concern, so the pharmaceutical companies will keep a close eye on enforcement,” Hufbauer said. “That’s a pretty serious issue in their industry.”