The US- Korea trade agreement, which takes effect today, is a major win for America’s small businesses. A key part of President Obama’s National Export Initiative, this historic agreement provides businesses with greater access to a fast growing market and more opportunities to create jobs. It is estimated that the tariff cuts in the agreement will support 70,000 American jobs.
The U.S. International Trade Commission estimates that the US-Korea agreement will increase annual exports to Korea by about $10 billion. Here at SBA, we’re ready to help small businesses tap into this market.
There are several provisions that benefit small businesses. For example, the agreement expands U.S. firms’ access to the $100 billion Korean government procurement market, ensuring that U.S. firms will get to bid on contracts on a level playing field. At the same time, the agreement preserves government procurement rules that benefit U.S. small businesses, for example in bidding on Department of Defense procurement, for which small businesses will continue to receive the same treatment they have in other agreements.
Leveling the playing field on government procurement will help small businesses like Rachel Carson. Rachel is president of Helicopter Tech, Inc. (HTI), a Pennsylvania company that provides thousands of aircraft parts to aviation companies. HTI is already exporting and Rachel is excited about continuing to grow her company. Having already attended business matchmaking events in Korea, this trade agreement will enable her to pursue viable exporting opportunities that were previously inaccessible.
“Made in America” goods will gain easier entrance into the Korean market thanks to the US-Korea trade agreement terms. The agreement will eliminate tariffs on over 95 percent of industrial and consumer goods within five years. Additionally, the agreement’s provisions on cross-border services, telecommunications, and electronic commerce offer advantages to the information and communications technology service sector – an area where the United States excels – benefitting small- and medium-sized American companies without the resources to establish an office in every market they serve.
SBA has a variety of programs and initiatives in place that will help these ambitious small business owners take advantage of the new market, scale up and create jobs. Many small businesses benefit from our International Trade Loans, or Export Express and Export Working Capital programs. American small businesses that shipped to Korea were supported last year by almost $40 million in loan guarantees under these programs.
Additionally, the State Trade Export Promotion (STEP) pilot program - a joint federal-state-and local program to help small businesses export – is enabling several states to conduct small business trade missions to Korea this summer focusing on industries such as food and agriculture, services and medical devices.
At SBA we know that exporting is a key way to help small businesses create an economy built to last. The US-Korea trade agreement comes at the perfect time to help the economic recovery continue to gain momentum and enable American small businesses to start or increase their level of exporting, grow and create jobs.