Information and Communications Technologies (ICT) Sector

An Expert's View about IT and Telecommunications in South Korea

Posted on: 11 Jun 2012

Korea is the 6th largest market for U.S. information and communications technologies (ICT) exports.

U.S. Department of Commerce International Trade Administration The U.S.-Korea Trade Agreement: Opportunities for the U.S. Information and Communications Technologies (ICT) Sector The U.S.-Korea Trade Agreement would provide signicant commercial opportunities for U.S. exporters: • Korea is the 6th largest market for U.S. information and communications technologies (ICT) exports; failure to pass the U.S.-Korea Trade Agreement could enable exporters from the EU and other countries to gain key advan- tages over U.S. information communications technology exporters to Korea. • Estimated duties paid on exports of U.S. ICT products to Korea were $428 million from 2008 to 2010. Tari elimi- nation could allow U.S. rms to reinvest in technology and production improvements. • Nearly all U.S. ICT exports to Korea would receive duty-free treatment immediately upon implementation of the U.S.-Korea Trade Agreement. ICT Sector Overview • ICT products accounted for $8.7 billion in U.S. exports to Korea over U.S. ICT Exports to Korea 2008-10 (average), or over 28 percent of total U.S. industrial exports to 1 Averaged $8.7 Billion Korea. • Top U.S. ICT exports to Korea include digital integrated circuitry, semi- $10.0 conductors, semiconductor manufacturing equipment, telecommu- nications equipment, radio and television parts, static converters, and $8.0 magnetic tape. $6.0 2 • In 2009, U.S. production of ICT products was over $218 billion. $4.0 • The United States leads in many of the more advanced computer hardware product segments (such as high performance computers and $2.0 servers), is a major vendor of PCs, disk drives and hardcopy peripheral $0.0 equipment, and has a strong hold on the global markets for software 2008 2009 2010 and IT services. 3 • The U.S. ICT sector employed over 763 thousand workers in 2009. • The Korean market oers areas of opportunity for U.S. exporters of ICT products and services, including computers (desktops, notebooks, and tablet PCs), storage and security technology, video servers and switches, other consumer electronic, and multi- media equipment, semiconductors and semiconductor production equipment, wireless broadband convergence network and 4G technology, telecommunications technology for smart phones, Internet protocol TV technology, 3D and smart television technol- ogy/content and social networking, smart grid, green ICT technology, and cloud computing services, especially software-as-a- 4 service. Improved Market Access for U.S. ICT Exporters to Korea • Korea is party to the World Trade Organization Information Technology Agreement (ITA) and as such most of the ICT products enjoy duty-free treatment and will continue to be duty-free under the U.S.-Korea Trade Agreement. • The remaining U.S. exports of ICT products, most of which currently face 8 percent taris in Korea, would enter Korea duty-free im- mediately under the trade agreement. These include radio and television parts, certain static converters, and certain telecommu- nications apparatus. Additionally, Korea’s tari of 20 won per minute on magnetic tapes (the equivalent of 13 percent ad valorem) would be eliminated immediately upon implemenation of the trade agreement. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Korea. The denition for ICT used in this report, unless otherwise cited, is based on products within Harmonized System (HS) Chapters 84, 85 and 90. 2 US. Department of Commerce, U.S. Census Bureau, within NAICS 333, 334 and 33592. Shipments used as a best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 333 and 334 (non-seasonally adjusted data) 4 U.S. Department of Commerce, U.S. & Foreign Commercial Service, 2010 Country Commercial Guide for Korea. April 2011 Additional information available at: in Billions USD Foreign Competition in the Korean Market Korea's Imports of ICT Products ** • Korea signed a trade agreement with the EU in 2009, which is scheduled to enter into force in July 2011. It also recently $20 signed an FTA with Peru, which is also scheduled to enter into force this year. Korea presently has FTAs in force with ASEAN, $15 Chile, India, Singapore, and EFTA. In addition, Korea is negotiat- $10 ing new agreements with Australia, Canada, Colombia, New Zealand, and Turkey; is considering launching FTA negotiations $5 with China; and is exploring re-launching its stalled negotia- tions with Japan. $0 ChinaJapan United T a iwan SingaporeEU • Top suppliers to Korea of ICT products include: China, Japan, States United States, Taiwan, Singapore, the EU, Malaysia, Philippines, ** 2007-09 Average (latest available data) Key States Exporting to Korea • Top U.S. states exporting ICT products to Korea include: Texas, California, New York, Oregon, Massachusetts, North Carolina, Minnesota, Ohio, Illinois, and Washington. Other Key U.S.-Korea Trade Agreement Commitments for the ICT Sector • Telecommunications: The U.S.-Korea Trade Agreement includes a commitment by Korea to permit U.S. companies within two years to own up to 100 percent of a telecommunications operator in Korea. The agreement also: (1) ensures U.S. operators cost-based access to the services and facilities of dominant Korean phone companies, including their submarine cable stations, facilitating U.S. companies’ ability to build competing networks to serve customers in Korea and (2) includes groundbreaking safeguards on restrictions that regulators can impose on operators’ technology choice, particularly in wireless technologies, where U.S. service and equipment suppliers have strong competitive advantages. • Government Procurement: Korea and the United States are members of the WTO Agreement on Government Procurement and already enjoy open and trans- parent access to each other’s government procurement markets. The U.S.-Korea Trade Agreement enhances this relationship by increasing the procurements to which U.S. suppliers will 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 emerging practices in procurement, reducing the tendering period for “o-the-shelf” goods and services and encourag- ing the use of electronic tendering. • Technical Barriers to Trade: The U.S.-Korea Trade Agreement strengthens disciplines to promote transparency in the way governments develop and apply technical regulations and related conformity assessment procedures (e.g., testing and certication). For example, Korea agreed to provide national treatment, or the same treatment applied to Koreans, to U.S. persons for participation in the development of stan- dards, technical regulations, and conformity assessment procedures; and to accreditation, licensing or approval of U.S. conformity assessment bodies. • Intellectual Property Rights: The agreement: (1) protects music, videos, software, and text from widespread unauthorized sharing via the Internet by giving copyright owners the ability to maintain rights over temporary copies of their works; (2) provides extended terms of protection; (3) establishes strong anti-circumvention provisions to prohibit tampering with technologies; (4) requires that government agencies use only legitimate computer software; (5) requires rules to prohibit the unauthorized receipt or distribution of encrypted satellite signals to prevent piracy of satellite television programming; and (5) provides rules for the liability of Internet Service Providers (ISPs) for copyright infringement. • E-Commerce: The U.S.-Korea Trade Agreement ensures non-discriminatory and duty-free treatment of all digital products (e.g., software, audio- visual products, etc), whether imported in physical form or over the Internet. The agreement also includes principles that provide for consumers’ reasonable access to the Internet for electronic commerce and contains commitments by both Parties to facilitate the use of electronic authentication in their respective markets. • Remanufactured Goods: Korea would eliminate its prohibition on the importation of remanufactured goods as dened in the initial provisions and denitions chapter, including remanufactured agricultural equipment, upon entry into force of the agreement. April 2011 Additional information available at: In Billions USD 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

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