New trade deal will aid US doing tyre business with South Korea
TIA says that the renewed free trade deal with South Korea is a good deal for the U.S. tyre market. President Obama signed the renewal of the U.S. Generalized System of Preferences (GSP), which was part of a trade pact originally agreed to between the U.S. and South Korea in 2007 – Korean-United States Free Trade Agreement.
The renewed agreement will reduce the tariff on the importing of South Korean manufactured car and truck radial tyres from 4 per cent (3.4 per cent for bias) through a series of graduated step-downs every year to zero starting in the fifth year of the agreement.
The duty-free importing of tyres from South Korea will extend for a total of 15 years when the free trade agreement will need to be renewed. The agreement’s initial year will be retroactive to 1 January 2011.
For U.S. tyre manufacturers, on the flip side, the South Korean import duty on U.S.-made tyres will go from the current 8 per cent to 0 per cent beginning the first year of the agreement.
“The renewal of the program removes 95 per cent of the existing tariffs within five years for goods and services covered by the pact and gives particular preference to the automotive sector for both the importing and exporting of goods, including tyres,” said Roy Littlefield, TIA executive vice president. “The agreement also provides greater access to the South Korean government procurement market for American companies.
“This agreement is of particular benefit to the American consumers who experienced a price hike on tyres in late 2009 when tariffs were imposed on Chinese passenger and light truck tyres imported to the U.S. South Korean tyre exports increased 63 per cent due to the import duty on China-made tyres and an aggressive manufacturing and marketing program by tyremakers there.” (Tire Review)