Understanding the Korea-United States Free Trade Agreement

In recent years, the Republic of Korea has been fervently executing free trade agreements (FTAs) with many different countries. This FTA-based trade policy serves to solidify Korea’s position as a major exporting country while also encouraging foreign direct investment by partnering FTA members. On March 15, 2012, Korea entered into the largest and most comprehensive FTA ever with the United States (KORUS FTA). Despite almost five years of negotiating to hammer out details on implementation, there is still much contention that surrounds the KORUS FTA. This paper provides a historical overview on the conception of the KORUS FTA, examines key provisions and concessions made by Korea in granting the United States access to the Korean automotive industry, discusses how the KORUS FTA will negatively impact weaker domestic industries, and highlights the controversy surrounding the investor-state dispute (ISD) settlement provision of the KORUS FTA.