President Barack Obama has been busy touting a free-trade deal between the U.S. and South Korea that gives new provisions for automobile imports. Instead of immediately or after three years as was previously agreed, the U.S. will end its 2.5% tariff on Korean cars in five years.
According further to a White House fact sheet, in return, South Korea will decrease its 8% tariff on U.S. cars to 4% instantly, instead of dropping the tariff altogether. American automakers will also be pleased to know that U.S. tariffs on Korean trucks will stay at 25% for eight years rather than dropping off immediately.
In addition, Ford Motor Co., General Motors Co. and Chrysler Group will be able to send to South Korea 25,000 cars each year that comply with U.S. safety standards.
These vehicles will be exempted from in-country standards. Obama said that the deal is a “win-win” for both countries. Obama said that the agreement will support a level playing field, boosting U.S. exports by up to $11 billion and backing at least 70,000 U.S. jobs.
The two countries inked a trade pact in 2007; however, the deal was never ratified due to concerns over the U.S. auto and beef industries.
Bloomberg reports that restarting the stalled agreement will create the largest U.S. deal since the North American Free Trade Agreement with Canada and Mexico in 1994. The two countries have over $68 billion between each other.