Ford Motor Co. and lawmakers rejoiced as the U.S. and South Korea finally agreed to change automobile provisions in a trade deal. They had previously agreed that the U.S. will end its 2.5% tariff on automobiles immediately or after three years but under the terms of the revised deal, the U.S. will do so in five years.
According to a White House fact sheet, Korea will slash its 8% tariff on U.S. automobile imports to 4% immediately rather than getting rid of it fully. And instead of starting to phase out the 25% tariff on truck imports immediately, the U.S. will keep this tariff for eight years.
South Korea said that it will permit more imports of U.S.-made vehicles that comply with American standards instead of Korean rules.
In an e-mailed statement, Ford CEO Alan Mulally said that due to these new provisions, Ford is more confident that it can improve its service for its Korean customers.
This deal is touted to be the largest in the U.S. since the North American Free Trade Agreement in 1994 as it involves nearly $68 billion in trade between the nations.
This agreement would also contribute to President Obama’s nearing his target to double American exports in five years. [via autonews - sub. required]