Aerospace Sector

An Expert's View about Aerospace in South Korea

Posted on: 11 Jun 2012

Korea is the 9th largest market for U.S. aerospace exports.

U.S. Department of Commerce International Trade Administration The U.S.-Korea Trade Agreement: Opportunities for the U.S. Aerospace Sector The U.S.-Korea Trade Agreement would provide signicant commercial opportunities for U.S. exporters: • Korea is the 9th largest market for U.S. aerospace exports; failure to pass the U.S.-Korea Trade Agreement could enable exporters from the EU and other countries to gain key advantages over U.S. exporters to Korea. • Estimated duties paid on exports of U.S. aerospace products to Korea were over $99 million from 2008 to 2010. Tari elimination could allow U.S. rms to reinvest in technology and production improvements. • All U.S. aerospace exports to Korea would receive duty-free treatment within three years of implementation of the U.S.-Korea Trade Agreement; Korean aerospace taris currently average 3.5 percent, ranging up to 8 percent. Aerospace Sector Overview U.S. Aerospace Exports to Korea • The aerospace sector accounted for $2.5 billion in U.S. exports Averaged $2.5 Billion to Korea over 2008-10 (average) or over 8 percent of total U.S. 1 industrial exports to Korea. $3.5 • Top U.S. aerospace exports to Korea include civilian aircraft $3.0 engines, equipment and parts, parts of military airplanes and $2.5 helicopters, and parts of civilian turbojet and turbo propeller $2.0 engines. $1.5 • In 2009, U.S. production of aerospace products was over $172 $1.0 2 billion. $0.5 $0.0 • The U.S. aerospace sector employed approximately 492,800 3 2008 2009 2010 workers in 2009. Improved Market Access for U.S. Aerospace All U.S. Aerospace Exports to Korea Exporters to Korea Would be Duty-Free Within Three • Korean aerospace taris average 3.5 percent, ranging from zero Years to 8 percent. 8% 4 • Over 92 percent of U.S. aerospace exports to Korea would receive duty-free treatment immediately upon implementation Immediate of the trade agreement. • Taris on the remaining 8 percent of U.S. aerospace exports to 3 Y e ars Korea would be eliminated in three years. 92% 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Korea. The denition for aerospace in this report, unless oth- erwise cited, is based on the product coverage under the WTO Civil Aircraft Agreement and includes products within HS 84, 85, 88, and 90. 2 U.S. Department of Commerce, U.S. Census Bureau, NAICS 33641. Shipments used as a best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, NAICS 33641 (non-seasonally adjusted data). 4 Data based on three-year average for 2008-2010. April 2011 Additional information available at: in Billions USD Foreign Competition in the Korean Market • Korea signed a trade agreement with the EU in 2009, which is scheduled to enter into force in July 2011. It also recently signed an FTA with Peru, which is also scheduled to enter into force this year. Korea presently has FTAs in force with ASEAN, Chile, India, Singapore, and EFTA. In addition, Korea is negotiat- ing new agreements with Australia, Canada, Colombia, New Zealand, and Turkey; is considering launching FTA negotiations with China; and is exploring re-launching its stalled negotia- tions with Japan. • EU aerospace exporters will immediately enjoy an average tari of 0.3 percent upon entry into force of the EU-Korea FTA, while U.S. exporters will face an average most favored nation (MFN) tari of 3.5 percent until entry into force of the U.S.-Korea 5 Trade Agreement. Key States Exporting to Korea • Top U.S. states exporting aerospace products to Korea include: Missouri, California, New York, Massachusetts, Texas, Connecticut, Georgia, Florida, Ohio, New Jersey, and Washington. Other Key U.S.-Korea Trade Agreement Commitments for the Aerospace Sector • Investment: The U.S.-Korea Trade Agreement establishes a stable legal framework for U.S. investors and investments in Korea, backed by a transparent, binding international arbitration mechanism. All forms of investment are protected under the Agreement. With few exceptions, U.S. investors would be treated as well as Korean investors (or investors of any other country) in the establishment, acquisition, and operation of investments in Korea. • Intellectual Property Rights: The U.S.-Korea Trade Agreement provides for robust protection and enforcement of intellectual property rights, includ- ing the extension of patent terms to compensate for unreasonable delays in granting an original patent. The trade agreement also has specic provisions for the protection of copyrighted works including measures designed to pre- vent piracy and unauthorized distribution over the Internet. Provisions to combat trademark counterfeiting include customs enforcement against goods-in-transit and streamlined customs procedures to increase eciency of enforce- ment. • Government Procurement: Korea and the United States are members of the WTO Agreement on Government Procurement and already enjoy open and transparent access to each other’s government procurement markets. The U.S.-Korea Trade Agreement en- hances this relationship by increasing the procurements to which U.S. suppliers would be ensured non-discriminatory access by reducing the goods and services threshold to $100,000 from $203,000 for central government entities. The Agreement also incorporates important improvements that reect the emerging practices in procurement, such as reducing the tendering period for “o-the-shelf” goods and services and encouraging the use of electronic tendering. 5 U.S. Department of Commerce calculations based on EU-Korea FTA and U.S.-Korea Trade Agreement tari commitments. April 2011 Additional information available at: U.S. Department of Commerce International Trade Administration The International Trade Administration - Your Global Business Partner The International Trade Administration (ITA) – a division of the U.S. Department of Commerce – strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of our trade laws and agreements. ITA also utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. For more information on exporting to Korea, please contact: • The ITA office of the U.S. Embassy in Korea at or 82-2-397-4535, or by visiting our website • The ITA trade specialist in the U.S. nearest you by visiting For more information on the U.S.- Korea Trade Agreement, please visit and For more information on industry-specific issues, please visit
Posted: 11 June 2012

See more from Aerospace in South Korea

Expert Views    
Aerospace Sector   By U.S. Commercial Service South Korea
Advanced Engineering Sector - Aerospace   By UK Trade & Investment