	Introduction

The U.S.-South Korea Free Trade Agreement (KORUS FTA) entered into force on March 15, 2012. However, the increase in the U.S. trade deficit with South Korea since the agreement's entry into force has caused some observers to question the benefits of the agreement, although other factors—including a decrease in South Korea's rate of economic growth—may have been the main drivers of evolving trade patterns. As discussed in the " Implementation Issues " section below, some U.S. companies have argued that certain aspects of the KORUS agreement are not being implemented appropriately. Perceptions about the KORUS FTA and its provisions may influence other U.S. trade negotiations, as well as congressional debate over their potential implementation. Views on the relative benefits of KORUS may also affect the ongoing Transatlantic Trade and Investment Partnership (T-TIP) negotiations between the United States and the European Union. Many observers have argued that in addition to its economic implications, the KORUS FTA has diplomatic and security implications. In December 2010, the United States and South Korea reached a joint understanding on automotive trade. Other Key Provisions

The KORUS FTA covers a broad range of other areas. Under TPA the President had the discretion on when to submit the implementing legislation to Congress. Despite signing the KORUS FTA in 2007, President Bush did not submit the implementing legislation to Congress because of differences, primarily with the Democratic leadership, over treatment of autos and beef, among other issues. On December 3, 2010, U.S. and South Korean leaders announced that they had reached agreement on addressing the outstanding issues related to the KORUS FTA. As a result, U.S. and South Korean negotiators agreed to modifications to some of the commitments made in the 2007 agreement. On October 3, 2011, President Obama submitted draft implementing legislation ( H.R. The President signed the legislation on October 21, 2011 ( P.L. 112-41 ). In 2013, the United States was South Korea's second-largest goods trading partner. As required by U.S. Trade Promotion Authority (TPA), which expired in 2007, the USITC conducted a study in 2007 of the KORUS FTA at the request of the President. Economic Impact: Two Years of the KORUS FTA

On entry into force of the KORUS FTA on March 15, 2012, 82% of U.S. tariff lines and 80% of South Korean tariff lines became duty free, whereas prior to the KORUS FTA, only 38% of U.S. tariff lines and 13% of South Korean tariff lines were duty free. Implementation Issues

During the more than two years that the KORUS FTA has been in force, the United States has raised several issues regarding its implementation. Express delivery packages . Data transfers . Implications for U.S. Trade Policy and U.S. Asia Policy

The KORUS FTA continues to have implications for U.S. trade policy and U.S. Asia policy. It is economically significant as South Korea is the sixth largest U.S. trade partner making the agreement the largest U.S. FTA after NAFTA. Japan and South Korea trade similar products with the United States, and despite generally low U.S. import tariffs, the KORUS FTA now provides South Korea with a competitive advantage in the U.S. market. The Obama Administration claimed this was a necessary step in approval of the agreement because "the [original] U.S.-Korea trade agreement did not go far enough to provide new market access to U.S. auto companies and to level the playing field for U.S. auto manufacturers and workers." on the investments from the other.
President Obama signed the legislation implementing the U.S.-South Korea Free Trade Agreement (KORUS FTA) on October 21, 2011 (P.L. 112-41), and the Korean National Assembly passed the agreement on November 22, 2011. The KORUS FTA entered into force on March 15, 2012.
With the KORUS FTA now in force for over two years, focus has shifted from the debate over its passage to its implementation, economic impact, and effect on future U.S. FTAs. Some U.S. companies have argued that certain aspects of the KORUS agreement are not being implemented appropriately, citing issues related to rules of origin verification, express delivery shipments, data transfers, and pending auto regulations. In addition, a widening trade deficit with South Korea since the implementation of the agreement has led some observers to argue the agreement has not benefitted the U.S. economy, but it is difficult to distinguish the KORUS FTA's impact on U.S.-South Korea trade patterns from the impact of other economic variables. As the largest of the recently passed U.S. FTA's, perceptions of the KORUS FTA's economic impact and concerns over its implementation may influence congressional debate in the new FTAs now under negotiation, specifically the Trans-Pacific Partnership (TPP), which South Korea has signaled an interest in joining, and the Transatlantic Trade and Investment Partnership (T-TIP) between the United States and the European Union.
The KORUS FTA is the second-largest U.S. FTA (next to NAFTA). In goods trade in 2013, South Korea was the sixth-largest trading partner of the United States, and the United States was South Korea's second-largest trading partner. The KORUS FTA covers a wide range of trade and investment issues and, therefore, could have significant economic implications for both the United States and South Korea.
Congress approved the KORUS FTA implementing legislation using expedited procedures authorized by Trade Promotion Authority (TPA). Under TPA, which expired in 2007, the President had the discretion on when to submit the implementing legislation to Congress. The KORUS FTA was negotiated and signed on June 30, 2007, by President George W. Bush. However, President Bush did not submit the legislation because of differences with the Democratic leadership over treatment of autos and beef, among other issues. On December 3, 2010, after a series of negotiations, President Obama and South Korean President Lee announced that they had reached an agreement on addressing the outstanding issues related to the KORUS FTA. As a result, the final implementing legislation modified certain provisions of the 2007 agreement, primarily focused on trade in agriculture and autos.
A broad swath of the U.S. business community supported the KORUS FTA. With the modifications in the commitments reached in December 2010, the three Detroit-based auto manufacturers and the United Auto Workers (UAW) union changed their positions and backed the agreement. Other labor unions and some nongovernmental organizations opposed the agreement. Many U.S. supporters viewed the KORUS FTA as important to secure new opportunities in the South Korean market, while opponents claimed that the KORUS FTA did not go far enough to break down South Korean trade barriers or that it would benefit U.S. corporations without producing gains for U.S. workers. Other observers suggested the KORUS FTA could have implications for the U.S.-South Korean alliance as a whole, as well as on U.S. Asia policy and U.S. trade policy.