Environmental Goods Sector

An Expert's View about Environmental Technologies in South Korea

Posted on: 11 Jun 2012

Korea is the 6th largest market for U.S. environmental goods exports.

U.S. Department of Commerce International Trade Administration The U.S.-Korea Trade Agreement: Opportunities for the U.S. Environmental Goods 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. environmental goods 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. environmental goods to Korea were over $216 million from 2008 to 2010. Tari elimination could allow U.S. rms to reinvest in technology and production improvements. • More than 95 percent of U.S. environmental goods exports to Korea by value would receive duty-free treatment within three years of implementation of the U.S.-Korea Trade Agreement; environmental goods taris currently average 5.8 percent, ranging up to 16 percent. Environmental Goods Sector Overview U.S. Environmental Goods Exports to • The environmental goods sector accounted for approximately $1.3 Korea Averaged $1.3 Billion billion in U.S. exports to Korea over 2008-10 (average) or over 4 per- 1 cent of total U.S. industrial exports to Korea. • Top U.S. environmental goods exports to Korea include air and gas $2.0 pumps, water ltration and purication machinery, heat exchange pumps, and renewable energy equipment, including solar and wind $1.5 technology components. • The U.S. environmental goods sector generated approximately $60 $1.0 2 billion in equipment sales in 2009. $0.5 • The U.S. environmental goods sector employed approximately 400 thousand workers in 2009, with an additional 1.3 million employed in 3 $0.0 environmental services. 2008 2009 2010 • The Korean market oers areas of opportunity for U.S. exporters in highly customized areas such as in-house recycling and ultra-pure 4 water treatment. • With Korea’s recently announced “Green Growth Strategy”, opportuni- More than 95% of U.S. Environmental ties for U.S. exporters will likely increase in the years ahead. Goods Exports to Korea Would be Duty- Improved Market Access for U.S. Environmental Free Within Three Years 3% 1% Goods Exporters to Korea • Korean environmental goods taris average 5.8 percent, ranging from zero to 16 percent. 5 25% • Nearly 71 percent of U.S. environmental goods exports to Korea Immediate would receive duty-free treatment immediately upon implementa- 3 Y e ars tion of the trade agreement. 5 Y e ars • Taris on an additional 25 percent of environmental goods exports to 71% Korea would be eliminated over three years, and taris on a further 10 Y e ars 1 percent of environmental goods exports would be eliminated over ve years. Taris on the remaining 3 percent of U.S. environmental goods exports would be eliminated in equal cuts over ten years. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Korea. The denition for environmental goods used in this report, unless otherwise cited, is based on the Environmental Goods Convergence List tabled as a non-paper in the WTO, with products falling within Harmonized System (HS) Chapters 39, 44, 69, 70, 73, 76, 84, 85, 89, 90 and 95. Total imports by Korea from the United States have been adjusted in an attempt to capture only environmental goods trade. 2 Environmental Business International, Inc. Note that data for the environmental goods industry and markets vary signicantly because of inexact denitions of the sec- tor. 3 Environmental Business International, Inc. 4 U.S. Department of Commerce, U.S. & Foreign Commercial Service, 2010 Country Commercial Guide for Korea. 5 Data based on three-year average for 2008-2010. April 2011 Additional information available at: www.trade.gov/KORUS in Billions USD Selected Sub-Sectors: • Air Pollution Control: Korea would eliminate taris on 33 percent of U.S. air pollution control exports immediately upon implementa- tion of the trade agreement. Taris on the remaining 67 percent of exports would be eliminated over three years. • Environmental Monitoring Equipment: Korea would eliminate taris on 99.8 percent of U.S. environmental monitoring equipment exports immediately upon implementation of the trade agreement. Taris on the remaining 0.2 percent of exports would be elimi- nated over three years. • Solid Waste Management: Korea would eliminate taris on 68 percent of U.S. solid waste management equipment and related prod- ucts immediately upon implementation of the trade agreement. Taris on more than 30 percent of exports would be eliminated over three years. Taris on less than 1.5 percent of exports would be eliminated over 5 years, and an additional 0.3 percent over 10 years. • Waste Water Management: Korea would eliminate taris on more than 50 percent of U.S. waste water management equipment and related products immediately upon implementation of the trade agreement. Taris on an additional 32 percent of exports would be eliminated over three years. Taris on a further 3 percent of exports would be eliminated over 5 years, and an additional 15 percent over 10 years. • Renewable Energy: • Biomass/Biofuel: Korea would eliminate taris on more than 56 percent of U.S. biomass/biofuel technology exports immediate- ly upon implementation of the trade agreement. Taris on an additional 38 percent of exports would be eliminated over three years and taris on the remaining 6 percent of exports would be eliminated over ve years. • Geothermal: Korea would eliminate taris on 91 percent of U.S. geothermal technology exports immediately upon implementa- tion of the trade agreement. Taris on an additional 8 percent of exports would be eliminated over three years and taris on the remaining less than 0.2 percent of exports would be eliminated over ve years. • Hydropower: Korea would eliminate taris on nearly 100 percent of U.S. hydropower technology exports immediately upon implementation of the trade agreement. Taris on less than 0.1 percent of exports would be eliminated over 10 years. • Solar: Korea would eliminate taris on 95 percent of U.S. solar technology exports immediately upon implementation of the trade agreement. Taris on an additional nearly 4 percent of exports would be eliminated over three years and taris on the remaining less than 1 percent of exports would be eliminated over ve years. • Wind: Korea would eliminate taris on 99.9 percent of U.S. wind technology exports immediately upon implementation of the trade agreement. Taris on the remaining 0.1 percent of exports would be eliminated over three years. Foreign Competition in the Korean Market • Korea signed a trade agreement with the EU in 2009, which is sched- uled 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 negotiating new agreements with Australia, Canada, Colombia, New Zealand, and Turkey; is considering launching FTA negotiations with China; and is exploring re-launching its stalled negotiations with Japan. • EU environmental goods exporters will immediately enjoy an average tari of 0.8 percent upon entry into force of the EU-Korea FTA, while U.S. exporters will face an average most favored nation (MFN) tari of 6 5.8 percent until entry into force of the U.S.-Korea Trade Agreement. Key States Exporting to Korea • Top U.S. states exporting environmental goods to Korea include: California, New York, Texas, Massachusetts, North Carolina, Alabama, Minnesota, Pennsylvania, Ohio, and Wisconsin. Other Key U.S.-Korea Trade Agreement Commitments for the Environmental Goods Sector • Investment: The U.S.-Korea Trade Agreement establishes a stable legal framework for U.S. investors and investments in Korea, backed by a trans- parent, binding international arbitration mechanism. All forms of investment are protected under the Agreement. With few excep- tions, 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. 6 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: www.trade.gov/KORUS 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 office.seoul@trade.gov or 82-2-397-4535, or by visiting our website www.export.gov/southkorea. • The ITA trade specialist in the U.S. nearest you by visiting www.export.gov/eac. For more information on the U.S.- Korea Trade Agreement, please visit www.export.gov/fta/korea and www.trade.gov/fta/korea. For more information on industry-specific issues, please visit www.trade.gov/mas/index.asp.
Posted: 11 June 2012

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