Debunking Myths about KORUS

A recent blog post by Tami Overby, VP of Asia, U.S. Chamber of Commerce addressees claims by opponents about the KORUS FTA and the North Korea's Kaesong Industrial Complex.

It's desperation time for the protectionists who oppose these job-creating Free Trade Agreements. In a last-ditch effort to undermine support for the Korea-U.S. Free Trade Agreement (KORUS), opponents are circulating the bogus accusation that the agreement will allow North Korean goods into the United States. Specifically, they charge that KORUS will allow goods made in the special industrial zone in Kaesong, North Korea, to enter the U.S. market and even allow such goods to benefit from tariff cuts under KORUS.

Here are the facts:

• It is illegal to import anything from North Korea, and KORUS will not change that. By the way, it is not true, as opponents claim, that Hyundai Motors has leased land that is "located in North Korea." In fact, an entirely separate company known as Hyundai Asan has an investment deal in North Korea - and with KORUS, no company, including Hyundai Asan, will be allowed to export anything from North Korea to the United States.

• Opponents also claim that KORUS FTA rules of origin would surreptitiously allow North Korean goods from Kaesong to be imported into the United States. U.S. sanctions against North Korea always trump the KORUS FTA. As long as U.S. sanctions against North Korea remain in place, the allowable percentage of Kaesong content in South Korean goods is zero.

• One chief goal of KORUS is to strengthen our already robust alliance with democratic South Korea in the face of North Korean threats. The U.S. alliance with South Korea is the linchpin of not only security for the Republic of Korea and the United States but also for the Pacific as a whole. The democratic South Korean government has repeatedly said the same.