Update on Status of U.S. Preparation to Implement Korea FTA
According to U.S. Trade Representative and International Trade Commission officials, certain government work must occur before a Proclamation can be issued that amends the Harmonized Tariff Schedule for the U.S.-Korea Free Trade Agreement (KORUS), including verifying compliance with FTA commitments and exchanging formal diplomatic notes.
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(While the earliest KORUS could take effect is January 1, 2012, one trade source states that it is not known if this compliance verification process and exchange of notes can be accomplished by then.)
Many FTA Commitments Must be Reviewed
According to an USTR fact sheet, the U.S. must work cooperatively with Korea to review both countries’ laws and regulations, and ensure compliance with the obligations that will take effect on the day the FTA enters into force, including the pertinent obligations of the 2011 exchange of letters on autos. U.S. officials will also consult with Congress and U.S. stakeholders.
Review Starting Now as Korea's Parliament Just Approved FTA
USTR officials state that the necessary work to verify that Korea is in compliance with the FTA obligations that will take effect on "day one" (i.e., a compliance review) is in its early stages, as the Korean Parliament just ratified the FTA on November 22, 2011. The U.S. Administration is planning a 'tight schedule' for this work, in order to complete it as soon as possible.
Exchange of Diplomatic Notes Must also Occur
After the compliance review, the exchange of formal diplomatic notes on the FTA must also occur before the Harmonized Tariff Schedule (HTS) can be amended by Proclamation.
Then President Can Issue Proclamation for Tariff Revisions, Product-Specific Rules, Etc.
Once these notes are exchanged, the President can issue a Proclamation containing specific tariff revisions and product-specific rules, and make additional administrative and regulatory changes covering issues such as customs and procurement.
An ITC official adds that its agency has asked the Administration to issue the Proclamation implementing the 2012 World Customs Organization-recommended and other tariff changes first, as the KORUS tariff changes are based on this anticipated 2012 version of the tariff schedule.
(See ITT's Online Archives 11101417 for summary of USTR fact sheet on "next steps" for implementation of Korea, Colombia and Panama FTAs. See ITT's Online Archives 11112214 for summary of Korean Parliament's approval of KORUS. See ITT's Online Archives 11102103 for summary of the President signing the KORUS implementing bill into law.
See ITT's Online Archives 11111719 for summary of WCO-recommended HTS changes scheduled for January 1, 2012.)