With the implementation of the U.S.-Korea Free Trade Agreement (KORUS FTA) there are exciting new opportunities for Virginia businesses and communities. By removing tariffs on goods and restrictions on services, this strengthened international partnership will spur business growth, create jobs, open new markets and provide access to a larger pool of consumers.

Virginia, known as “The Old Dominion State,” is home to a wide range of businesses, from agriculture to technology. These organizations are capitalizing on expanded opportunities created by the reduction of tariffs, elimination of trade barriers, and the free flow of products, services and ideas between Virginia and Korea.

Below are a few of the products that benefit from the KORUS FTA.

O p p o r t u n i t i e s f o r V i r g i n i a

www.USKoreaConnect.org • The Embassy of the Republic of Korea

Trade Growth Jobs•In 2012, Virginia exported $313.6

million in goods to Korea.

•In 2012, Virginia imported $180.2 million in goods from Korea.

•The KORUS FTA more closely connects Virginia businesses with Korea, a $1 trillion market with more than 50 million consumers.

•The KORUS FTA is a significant and important catalyst for job creation in Virginia.

Virginia’s Top Trade Items with Korea (2012)

Exports

Resins and synthetic fibers$51.5 million

Pulp and paper$33.7 million

Clay and refractory products$24.6 million Soaps and cleaning agents$17.5 million

Semiconductors and components$16.2 million

Iron and steel$13.6 million

Meat$11.5 million

Virginia’s Top Beneficiary Trade Items

Exports

Ceramic Products• Ceramic wares for laboratory use 8% tariff being eliminated over 3 years

Textiles• Yarn of cellulose acetate 8% tariff eliminated immediately

Plastics• Plastic plates, sheets and films 6.5% tariff eliminated immediately or

over 3 years

Transportation• Clutches and clutch parts for motor

vehicles 8% tariff eliminated immediately

Imports

Transportation• Steering wheels, columns and boxes

for motor vehicles 2.5% tariff eliminated immediately

Plastics• Styrene polymers 6.5% tariff being eliminated over 5 years

Machinery/Electrical• Storage batteries 3.4% tariff eliminated immediately

Textiles• Synthetic polyester fibers 4.3% tariff eliminated immediately

Imports

Resins and synthetic fibers $25.7 million

Motor vehicle parts$25.2 million

Fabricated metal products$13.7 million

Plastics$12.5 million

Electrical equipment and components$10 million

Foundries$8.1 million

Pulp and paper$6.9 million

www.USKoreaConnect.org

Businesses and communities around Virginia are taking advantage of opportunities from the KORUS FTA and the strong relationship between the United States and Korea.

Watch Us Grow Together

*Left photograph: An F-15K Slam Eagles delivered to the Republic of Korea Air Force (ROKAF) on April 2 at Daegu Air Base (c) BoeingRight photograph: FURminator® deShedding Tools in Asian packaging

Communications-Applied TechnologyReston, VirginiaIndustry: Manufacturing

Profile: Since 1982, Communications-Applied Technology (C-AT) has designed and manufactured communications equipment for civilian and military first responders. Its radio systems, intercoms and interoperability equipment are built to withstand use in the most hazardous environments. The veteran-owned company, which currently has 13 employees, works with other small businesses to manufacture its products.

Trade: C-AT exports to about 18 countries. It began trading with Korea in 2008, when the company was approached by a Korean distributor. The distributor facilitated a deal for C-AT to develop a customized communications system for the Korean Coast Guard. The system included 65 interoperability units that allowed communications between different types of devices (e.g. from a telephone to a two-way radio).

Growth: C-AT is continuing to work with its distributor in Korea to secure new business with police and military agencies. In the next few years, the company expects that the Korean government will move forward with buying and setting up emergency communications equipment. C-AT plans to pursue that business.

Bristol Compressors InternationalBristol, VirginiaIndustry: Manufacturing

Profile: Established in 1974, Bristol Compressors International, Inc. manufactures a full line of compressors that are used in air conditioning, heat pump and refrigeration applications. The company, with 750 employees, supplies products to original equipment manufacturers and wholesale distributors including Carrier, York, Goodman and Rheem.

Exports: Bristol, which exports about half of its products, supplies compressors to customers in more than 50 countries. It began exporting to Korea in the mid-1980s, partnering with a distributor who continues to represent the company today. Bristol does approximately $4 to $5 million in business annually with Korea, a number that has remained steady over the past five years. Its Korean customers include original equipment manufacturers like LG Electronics and Samsung.

Growth: The KORUS FTA reduces an 8 percent tariff on Bristol’s products, making them more competitive in the Korean market. The company is placing a renewed focus on the refrigeration segment of the Korean market to take advantage of this opportunity. After conducting product field trials for a large well-known producer in Korea, Bristol secured the company as new business and significantly increased its sales in Korea.

Industry: Manufacturing

Profile: American Hardwood Industries (AHI) is one of the leading producers and suppliers of North American hardwood logs, lumber and flooring. The company, established in 1955, includes three subsidiaries: Augusta Lumber (Virginia), Blue Triangle Hardwoods (Pennsylvania) and Graham Lumber (Tennessee). With 650 employees in four states, it manufactures more than 110 million board feet annually.

Trade: AHI exports about 6,000 containers per year to customers around the world, amounting to about 75 percent of its business. The company began exporting to Korea more than 50 years ago. Today, AHI considers Korea a major market with customers that include importers, distributors and manufacturers. In some cases, these manufacturers export furniture and other products to the United States and other countries.

Growth: For the past five years, Korea has remained a stable market for AHI. Now, with the implementation of the KORUS FTA, AHI has increased its focus on the Korean market. By eliminating tariffs, the free trade agreement lowers the price of AHI’s products and makes them more attractive than hardwood from Africa, South America, Europe and Southeast Asia.

American Hardwood IndustriesWaynesboro, Virginia

Industry: Manufacturing

Profile: W R Systems, Ltd. (WRSystems), founded in 1983, is a systems engineering product development and support services firm. The company, which currently has 335 employees, supports both government and commercial contracts through offices in Fairfax and Norfolk, Virginia.

Trade: In the past, WRSystems has worked with the Korean Navy to supply products and conduct training sessions through a U.S. government program. Now, the company is focused on growing its commercial maritime business in Korea and becoming a supplier to the shipbuilding industry. As one of the top shipbuilding countries in the world, Korea has the potential to be a major market for the company.

Growth: WRSystems is selling an emissions monitoring system to Korean shipbuilding companies through an in-country agent. The company has been named a qualified bidder for Korean shipbuilders including Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding and Marine Engineering and others. WRSystems also attended Kormarine: International Shipbuilding & Marine Equipment Exhibition in Korea in 2012, where it submitted 30 to 40 proposals in the Korean market.

W R Systems, Ltd.Norfolk, Virginia

www.USKoreaConnect.org

Interesting Facts About Trade with Korea

Support From Around Virginia

Connections Beyond Trade

• Virginia, known for its agriculture, exported more than $26 million in frozen pork products to Korea between 2009 and 2012, making Korea the state’s third largest market for frozen pork products.

• Virginia exported $23.4 million in ceramic wares for laboratory use to Korea in 2012.

• Virginia, home to a robust lumber industry, exported almost $1.3 million in wood and wood pulp to Korea in 2012.

• In 2012, Virginia exported $20.5 million in yarn from man-made filaments to Korea, 7.4 times its total for the same goods during 2011 ($2.8 million).

Korean Markets for Virginia Companies

March 15, 2013

International trade is an integral part of Virginia’s economy, and trade with Korea has the potential to be a powerful economic asset for our businesses. Today, there are more opportunities than ever for Virginia manufacturers and service providers to increase trade with Korea’s growing economy.

Remarks from United States Congressman Bob Goodlatte (VA)

December 2, 2010

“I am for the [KORUS FTA] because we already have very open markets for their products coming to the United States. To me it’s a no-brainer to have them agree to open their markets up so we can export our products into Korea.

• In 2011, it was estimated that there were approximately 78,490 Koreans and Korean Americans living in Virginia.

• There were more than 1,650 students from Korea studying at colleges and universities in Virginia in 2012.

• As the official university partner for the USA Pavilion Expo, the University of Virginia selected 40 American college students to serve as Student Ambassadors for the 2012 Expo held in Yeosu, Korea, eight of whom attended Virginia colleges and universities.

• Annandale, Virginia, known as Washington’s Koreatown, is home to the regional edition of The Korea Daily, a Korean-American newspaper dedicated to covering news of interest to Korean-Americans in the Annandale community.

The first Korean ever to graduate from an American college or university was Beung-Kiu Suhr, who graduated from Roanoke College in 1898.

Free Trade Agreements Expected to Boost Va. Agriculture Exports

March 22, 2012

As soon as the KORUS FTA was enacted, two-thirds of U.S. agricultural products exported to Korea became duty-free. More than 95 percent of U.S. exports will become duty-free over the next five years, and all agricultural products will be duty-free by 2027.

www.USKoreaConnect.org • The Embassy of the Republic of Korea

All figures in U.S. dollars. Information based on data from the U.S. International Trade Commission, U.S. Department of Agriculture, U.S. Census Bureau, Ministry of Knowledge Economy of Korea, Export-Import Bank of Korea, Korea International Trade Association, Bureau of Economic Analysis, the Institute of International Education, the International Monetary Fund, the Virginia Economic Development Partnership - Division of International Trade and Investment, Virginia International Business Council, the Fairfax County Economic Development Authority, the Northern Virginia Regional Park Authority, and the Virginia Department of Agriculture and Consumer Services.Last updated: July 2013

U.S. Korea Connect’s LinkedIn, Facebook and Twitter groups help businesses connect with one another and learn more about taking advantage of the U.S.-Korea Free Trade Agreement. As a member of our online community, you’ll have exclusive access to data, research, events and information that can help give you a competitive advantage. Visit www.USKoreaConnect.org/Business-Connect to connect, collaborate and succeed.

Please visit our website at www.USKoreaConnect.org for information on how to contact local business groups and the Embassy of the Republic of Korea.

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National SnapshotThe U.S.-Korea Free Trade Agreement (KORUS FTA) is an international partnership that

connects the United States with the dynamic and growing Korean and Asia-Pacific markets.

KORUS FTA at a Glance

•U.S. exports to Korea faced an average applied tariff of 12.1%, while the average U.S. tariff on Korean exports was 3.5%.

• More than 95% of U.S. exports will become duty free within 5 years, and almost all tariffs will be eliminated within 10 years.

•The KORUS FTA contains strong provisions regarding transparency, intellectual property rights and competition, particularly in the services sector.

•The free trade agreement makes U.S. businesses more competitive in Korea and provides a model for future trade agreements.

About Korea

• Population: 50 million (July 2012)

• GDP per capita (nominal): $22,778 (2011)

• GDP (PPP-based): $1.62 trillion, ranking Korea the world’s 12th largest economy* (2012)

• GDP (nominal): $1.15 trillion (2012)

• Real GDP growth rate: 2.0%* (2012)

• In 2011, Korea was ranked 8th and 9th, respectively, among leading exporters and importers in world merchandise trade.

*Projected figure

Korea-U.S. Connections

TRAdE RELATIONS

•The United States exported $42.3 billion worth of goods to Korea and imported $58.9 billion worth in 2012.

•Korea is the United States’ 7th largest trading partner, while the United States is Korea’s 3rd largest.

INVESTMENT•U.S. foreign direct investment (FDI) in Korea was

$3.9 billion in 2012.•Korea’s FDI in the United States was $6.9 billion in 2012.

Benefits of the KORUS FTA

ECONOMIC GROWTH: By expanding trade ties with Korea’s dynamic, growing, high-income economy, the agreement will increase U.S. economic growth by up to $11.9 billion at no cost to U.S. taxpayers.

JOBS: The implementation of the KORUS FTA supports the creation of jobs in the United States.

SHAREd VALUES: Korea is a vibrant democracy, a staunch ally of the United States and a major commercial center in East Asia that provides America with a strong partner in an increasingly important region.

** All investment figures are on a “notification basis as reported.”