Construction Equipment Sector

An Expert's View about Machinery and Robotics in South Korea

Posted on: 11 Jun 2012

Korea is the 8th largest market for U.S. construction equipment exports.

U.S. Department of Commerce International Trade Administration The U.S.-Korea Trade Agreement: Opportunities for the U.S. Construction Equipment Sector The U.S.-Korea Trade Agreement would provide signicant commercial opportunities for U.S. exporters: • Korea is the 8th largest market for U.S. construction equipment 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. • Passage of the trade agreement would improve the U.S. competitive position in Korea, and could allow U.S. rms to reinvest in technology and production improvements. • The trade agreement would benet the U.S. construction equipment sector in a number of key aspects, including by increasing non-discriminatory access to procurements by Korean central government entities. Construction Equipment Sector Overview U.S. Construction Equipment Exports to • The construction equipment sector accounted for $263 million in KoreaAveraged $263 Million 1 U.S. exports to Korea over 2008-10 (average). • Top U.S. construction equipment exports to Korea include con- struction equipment parts and attachments, boring and sinking $400 machinery, conveyors, loaders, bulldozers, mechanical shovels, $300 and dumpers. • $200 In 2009, U.S. production of construction equipment products was 2 about $40 billion. $100 • The U.S. construction equipment sector employed over 130,000 3 $0 workers in the United States in 2009. 2008 2009 2010 • Since the 1990s, Korea has become one of the major construction equipment manufacturing countries for excavators, loaders and forklifts. However, the Korean market continues to oer areas Ko rea's Imports of Construction of opportunity for U.S. exporters, including in concrete forming systems, tunnel boring machines, road repairing equipment, Equipment ** 4 and mobile concrete plants. $800 $600 Market Access for U.S. Construction Equipment $400 Exporters to Korea $200 • As a signatory of the Uruguay Round sector agreement on con- $0 struction equipment, Korean taris in the sector are zero and would remain at that level under the trade agreement. ** 2007-09 Average ( latest available data) 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Korea. The denition for construction equipment used in this report, unless otherwise cited, includes selected products within Harmonized System (HS) Chapters 84 and 87. 2 U.S. Department of Commerce, U.S. Census Bureau, NAICS 333120, 333131, 333923, and 333924. Shipments used as a best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, NAICS 33312 and 33392 (non-seasonally adjusted data). 4 U.S. Department of Commerce, U.S. & Foreign Commercial Service, including from 2010 Country Commercial Guide for Korea. April 2011 Additional information available at: In Millions USD in Millions 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 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. • Top countries that compete with U.S. construction equipment exporters in the Korean market include Japan, the EU (Germany), and China. Key States Exporting to Korea • Top U.S. states exporting construction equipment to Korea include: Texas, California, Illinois, Louisiana, Massachusetts, Wisconsin, North Dakota, Pennsylvania, Alabama, and Minnesota. Other Key U.S.-Korea Trade Agreement Commitments for the Construction Equipment Sector • 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 enhances 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 incorporated 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. • Rules of Origin: The U.S.-Korea Trade Agreement rules of origin allow only products that are produced in the United States and Korea to receive preferences under the Agreement. The trade agreement rules of origin provide clear requirements for a good to be considered originating, including that a good must be wholly obtained or produced entirely in the territory of the United States or Korea as well as requirements on materials that are used in the production of the good. Importers may claim preferences under the trade agreement based on a certication by the importer, exporter, or producer or based on the importer’s knowledge that the good is originating, but certications need not be in a prescribed format. • Investment: The U.S.-Korea Trade Agreement establishes a stable legal framework for U.S. investors and investments operating in Korea, backed by a transparent, binding international arbitration mechanism. All forms of investment are protected un- der 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. • Remanufactured Goods: Korea would eliminate its prohibition on the importation of remanufactured goods as dened in the initial provisions and denitions chapter, including remanufactured construction equipment, upon entry into force of the agreement. 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

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