Shipping and Transportation Equipment Sector

An Expert's View about Transportation and Storage in South Korea

Posted on: 11 Jun 2012

Korea is the 16th largest market for U.S. shipping and transportation equipment exports.

U.S. Department of Commerce International Trade Administration The U.S.-Korea Trade Agreement: Opportunities for the U.S. Shipping and Transportation Equipment Sector The U.S.-Korea Trade Agreement would provide signicant commercial opportunities for U.S. exporters: • Korea is the 16th largest market for U.S. shipping and transportation 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. • Estimated duties paid on exports of U.S. shipping and transportation products to Korea were over $2.8 million from 2008 to 2010. • All U.S. exports of shipping and transportation equipment exports to Korea will be duty-free within three years of implementation of the U.S.-Korea Trade Agreement; Korean shipping and transportation equipment taris currently average 3.8 percent, ranging up to 8 percent. U.S. Shipping and Transportation Shipping and Transportation Sector Overview Products Exports to Korea Averaged $39 • The shipping and transportation equipment sector accounted Million for over $39 million in U.S. exports to Korea over 2008-10 (aver- 1 age). $60 • Top U.S. shipping and transporation equipment exports to Ko- $50 rea include transportation vessels, shing vessels, and transport $40 containers. $30 • In 2009, U.S. production of shipping and transportation equip- $20 2 ment products was over $48 billion. $10 • The U.S. shipping and transportation sector employed over $0 3 155,000 workers in 2009. 2008 2009 2010 Improved Market Access for U.S. Shipping and All U.S. Shipping and Transportation Transportation Exporters to Korea Exports to Korea Would be Duty-Free • Korean shipping and transport taris average 3.8 percent, rang- Within Three Years 1% ing from zero to 8 percent. • More than 99 percent of U.S. shipping and transportation 4 equipment exports to Korea, including high trade items such as ships, steel shing vessels, and transport containers, would Immediate receive duty-free treatment immediately upon implementation of the trade agreement. 3 Y e ars • Taris on the remaining less than 1 percent of shipping and 99% transportation exports to Korea would be eliminated over three years. 1 Global Trade Atlas. Calculation based on import data as reported by Korea. The denition for shipping and transporation equipment used in this report, unless otherwise cited, is based on Harmonized System (HS) Chapters 86 and 89. 2 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 333 and 336. Shipments used as a best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 336. 4 Data based on three-year average for 2008-2010. April 2011 Additional information available at: In Mllions 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 shipping and transporation equipment exporters will im- mediately enjoy an average tari of 0.5 percent upon entry into force of the EU-Korea FTA, while U.S. exporters will face an aver- age most favored nation (MFN) tari of 3.8 percent until entry 5 into force of the U.S.-Korea Trade Agreement. Key States Exporting to Korea • Top U.S. states exporting shipping and transportation equipment to Korea include: California, Pennsylvania, New Jersey, Illinois, New York, Massachusetts, Texas, North Carolina, South Carolina, and Georgia. Other Key U.S.-Korea Trade Agreement Commitments for the Shipping and Transportation 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 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 the emerging practices in procurement, reducing the tendering period for “o-the-shelf” goods and services and encouraging the use of electronic tendering. • Customs Procedures: The U.S.-Korea Trade Agreement requires transparency through the publication of customs measures to ensure that the U.S. and Korean private sectors have access to customs laws and regulations. To the extent possible, those interested will be given an opportunity to comment on generally applicable customs regulations proposed by the United States or Korea. The trade agreement requires simplied customs procedures for the timely and ecient release of goods in order to facilitate “just-in-time” supply chain logistics systems, as well as procedures intended to reduce delays in customs clearance. • 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. 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

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Expert Views    
Shipping and Transportation Equipment Sector   By U.S. Commercial Service South Korea