The Florida / Korea Report published by
Florida-Korea Economic Cooperation Committee “FLOR/KOR” “플로리다-한국 경제협력 위원회” www.florkor.org
Spring 2016 Edition FLOR/KOR Supports & Participates in Enterprise Florida Trade Mission to Korea FLOR/KOR actively participated in and supported the Enterprise Florida Export Trade Mission to Seoul, South Korea this past April 16-20, officially led by Florida Secretary of Commerce, Bill Johnson.
The mission ended with a private reception at the official residence of the U.S. Ambassador to Korea, and included an excellent opportunity for Florida delegates to network with senior Korean business leaders, such as the Vice President of Hyundai, the PresFLOR/KOR’s executive director, Dave ident of Northrop Grumman Korea and othWoodward, joined the delegation, and par- er top business and government leaders. ticipated in business meetings held at the Korea International Trade Association During a private business meeting with KITA (KITA) at their headquarters in Seoul as and Sec. Johnson, the senior management well as meetings wit the Korea Importers of KITA requested that FLOR/KOR work Association (KOIMA) and briefings by the with them to arrange a follow up event, such U.S. Embassy/Foreign Commercial Service as Florida-Korea Summit, the near future. (See related article, p.2, below.) for . In addition, he accompanied Sec. Johnson at private meetings with the U.S. Ambassador to Korea and meetings arranged by FLOR/KOR at the Korea Automobile Manufactures Association (KAMA) and at Samsung Electronics’ Seoul office and showroom. Enterprise Florida also conducted a Florida Business Seminar at the Korea International Trade Association during the mission at KITA’s headquarters with Korean companies interested in investing in Florida or doing with Florida companies. Sec. Johnson and FLORKOR’s executive director gave presentations along with Fred Glickman, V.P. of Enterprise Florida’s international operations, and the Vice President of the Florida Chamber of Commerce, David Hart. Jiseon Park, special assistant to FLOR/ KOR’s executive director, helped coordinate and assisted with all the meetings and presentations as well.
Inside This Issue: FLOR/KOR Planning Next Florida-Korea Summit General Electric to Supply Korea with Jet Engines USTR Highlights Benefits of U.S.-Korea FTA on Fourth Anniversary Interesting Facts About Florida/Korea Trade Spotlight on the FTA: Beer makes It Big in Korea
Florida Korea Trade Data
Upcoming Events/Save the Dates
Florida Secretary of Commerce Bill Johnson (center) with Mr. Peter Rhee, Vice President, Global Public Affairs Group, Corporate Communications Team, Samsung Electronics (fourth from right), along with Florida delegation members.
KITA Announces New Chief Rep for Wash., D.C. Office
From left to right: Florida Secretary of Commerce Bill Johnson,; Ms. Jiseon Park, Special Assistant to the Exec. Director, FLOR/KOR ; & Mr. Dave Woodward, Exec. Director, FLOR/ KOR at the U.S. Ambassador’s official residence in Seoul.
The Korea International Trade Association (KITA) recently announced the appointment of Mr. Minsok Chu as President and Chief Representative of its KITA Washington Center, LLP. KITA Washington develops cooperative activities with various business/int’l organizations and think tanks in Washington, DC.
Mr. Minsok Chu, the
The KITA Washington Cen- newly appointed President & Chief Rep, ter maintains a close rela- KITA, Washington, DC. tionship with the U.S. federal government, Congress. as well as state governments for the mutual interest of both Korean and U.S. enterprises that are currently conducting business or seeking new business opportunities in trade and investment.
2 3 Florida Secretary of Commerce Bill Johnson (left) with Mr. Jungsoo (James) Kim, Executive Managing Director, International Affairs Group, KITA
Mr. Chu previously served as Director of International Trade Cooperation Department at KITA headquarters in Seoul. While there, he mainly focused on promoting bilateral trade between Korea and the United States and training and educating trade experts. Prior to that, he served as director of KITA’s Americas Department, and has a long history of working closely with FLOR/ KOR to help promote Florida-Korea business ties. Source: KITA Washington Center, Washington, DC.
Florida / Korea Report
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FLOR/KOR Planning Next Florida-Korea Summit
The Honorable Seong Jin Kim, Consul General of the Republic of Korea in Atlanta speaking at the 2015 FL-Korea Summit hosted by Port Tampa Bay.
FLOR/KOR has begun preliminary planning of it’s next statewide Florida-Korea Summit program, which it tentatively hold in Miami in the Spring of 2017. Last year, FLOR/KOR held the annual summit program at Port Tampa Bay in Tampa, and is currently considering possible venues in Miami for the next Summit.
cial, such as the Korean Ambassador to the U.S. or the Korean Consul General in Atlanta along with panel sessions featuring presentations from Florida-Korea business, economic development, education, tourism and cultural leaders from around the state. The next summit will also serve as a follow up event to the Florida Business Seminar that was held in Seoul at Korea International Trade Association (KITA) as part of the Enterprise Florida Export Trade Mission that FLOR/KOR actively supported and participated in this past April 16-20th. FLOR/KOR plans to invite the participation senior KITA officials and a KITA delegation of same of it’s key member companies.
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General Electric to Supply Korea with Jet Engines South Korea has picked General Electric Co. to supply engines for its homegrown KF-X fighter jet project, preferring the U.S. giant over a European consortium in a deal that could be worth an estimated $3.5 billion. The decision, announced on Thursday by the country's arms procurement agency marks the latest step in Seoul's multi-billion dollar plans to develop its own fighter jets to reduce its heavy reliance on the U.S. military for air defense.
Last year, South Korea's Defense Acquisition Program Administration picked Korea Aerospace Industries Ltd., which partners with Lockheed Martin Corp. to develop This annual summit program More details will be announced the 8.7 trillion won ($7.4 bilnormally features keynote re- in future newsletters and via lion) KF-X jet project. marks by a senior Korean offi- our website www.florkor.org
KAI plans to develop and produce 170 twin-engined jets initially, with 50 destined for export to Indonesia, a person with knowledge of the matter told Reuters, speaking on condition of anonymity because the situation was confidential. More engines are expected to be sold if KAI successfully exports the KF-X to other countries seeking a relatively cheaper replacement for their U.S.-supplied jets. To power the aircraft, KAI has opted for F414-GE-400 engines, produced by GE Aviation, over a rival bid to supply Eurojet EJ200 engines. GE Aviation scored better results than Eurojet in all four main criteria for the contract. Source: Reuters 5-25-16
USTR Highlights Benefits of U.S.-Korea FTA on Fourth Anniversary The Office of the U.S. Trade Representative on March 15 issued a fact sheet highlighting the many benefits that the U.S.-Korea Free Trade Agreement continues to provide four years after it entered into force to American businesses, workers and farmers. By contrast, the Coalition for a Prosperous America claimed that the agreement has significantly worsened the bilateral trade deficit with Korea. The USTR fact sheet indicates that U.S. manufacturing exports to Korea went up by 8.4 percent from $34.4 billion in 2011 to $37.3 billion in 2015, with shipments of passenger vehicles (up by 207.9 percent to $1,287million) and pharmaceuticals (up by 48.3 percent to $934 million) experiencing brisk growth and shipments of machin-
ery achieving a more moderate 13.1 percent gain to $6.9 billion. In addition, sales of “Detroit 3” cars in Korea rose 21 percent during 2014-15, outpacing both the overall growth of U.S. exports to Korea and worldwide exports of U.S. passenger vehicles.
$22.4 billion in 2015. This rate of growth nearly tripled the overall 13.1 percent growth of U.S. services exports to the world. USTR observes that the agreement has provided greater access to Korea’s market for U.S. express delivery services and now allows U.S. investors to wholly own Korean Also doing well during 2011/15 were a telecommunications operators and range of agricultural and food prod- some broadcast service providers. ucts, including beef (up by 18.1 percent to $810 million), lemons (up by The fact sheet indicates that a slow233.3 percent to $30 million), shelled down in economic growth in Korea almonds (up by 143.2 percent to $180 partly due to the slowdown in the Chimillion), fresh cheese (up by 390.0 nese economy is driving down depercent to $147 million), cherries (up mand for imports across the board, by 172.5 percent to $109 million) and including imports from the U.S. wine and beer (up by 83.3 percent to $33 million). Despite these headwinds, combined U.S. goods and services exports to Exports of dairy products grew by Korea still managed to increase by 1.2 nearly 37 percent from 2011, while percent in 2015, compared to a 5.1 shipments of citrus fruit advanced 25 percent drop in U.S. goods and serpercent. U.S. services exports to Ko- vices exports to the world. rea have also done well in recent years, growing by 34.5 percent from $16.7 billion in 2011 to an estimated Source: Sandler, Travis & Rosenberg Trade Report 3-21-16
Florida / Korea Report
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Interesting Facts About Florida/Korea Trade
Florida, famous for its citrus fruit, exported more than $4.8 million of grapefruit to Korea in 2014, an increase of 50 percent over the 2011 total of $3.2 million. From 2008 to 2014, Florida increased its exports of motor vehicle parts and accessories to Korea more than 12-fold, from $1.07 million to $13.3 million. In 2014, Florida exported $64.9 million in aircraft, spacecraft and parts,
nearly four times its total for the Florida, who meets the same critesame goods through all of 2011 ria. Jacksonville, Florida, is a sister ($16.7 million). city with Changwon South Gyeongsang, Korea. Known for having 2,200 miles of shoreline and more than 11,000 In 2014, Florida exported $641.3 miles of rivers, streams and water- million in goods to Korea. In 2014, ways, Florida exported $1.7 million Florida imported $1.8 billion in worth of crustaceans to Korea in goods from Korea. 2014, more than 30 times its 2011 total of $56,000. The KORUS FTA more closely connects Florida businesses with KoIn 2013, it was estimated that there rea, a $1 trillion market with more were approximately 23,800 Kore- than 51 million consumers. The KOans and Korean Americans living in RUS FTA is a significant and imFlorida. There were approximately portant catalyst for job creation in 1,414 students from Korea studying Florida. at universities in Florida during the 2012/2013 academic year. The U.S.-Korea Free Trade Agreement has been a boon for FloridaSince 2011, a Floridian who pos- Korea trade since it was enacted in sesses a driver license and lives in 2012, and Florida export sales to Korea can exchange his/her license Korea have increased by 50 perfor a Korean non-commercial driver cent. license without taking a test. The same goes for a Korean living in Source: U.S. Korea Connect Newsletter, May 2016
Spotlight on the FTA: Beer makes It Big in Korea Since the implementation of the KORUS FTA, the 30 percent tariff on U.S. beer has dropped to 8.5 percent. The tariff on American beer is expected to be completely eliminated by 2018. U.S. beer exports to Korea reached $9.7 million in 2015, which is an 18.1 percent increase from 2014 and an 87.4 percent increase from 2011, the year before the KORUS FTA was put into effect. Nearly 80 percent of beer exports in 2015 came from California, reaching $7.6 million. Currently, the United States is Korea's 9th largest beer supplier whereas Korea is the 6th largest beer import market for the United States. The KORUS FTA opened up the Korean market and allowed U.S. companies to feed Korea's preferences for U.S. nuts, chicken and sausage products, which are popular snacks to eat with beer for Koreans.
Korea is experiencing a rise in beer drinking among health conscious consumers who are eschewing traditional Korean liquors with high alcohol content. Korea's overall beer imports have more than tripled within the last five years, totaling $111.7 million in 2014 according to the USDA Foreign Agriculture Service. Beer imports from the United States, specifically, accounted for a total of $7.3 million in 2014. The United States is Korea's 6th largest beer supplier and American craft beers have emerged as a perfect option for Korean consumers looking for a flavorful beverage with lower alcohol content.
2014 alone. Much of this growth is due to the implementation of the KORUS FTA.
Since the implementation of the KORUS FTA in 2012, tariffs on U.S. beer exports have dropped from 30 to 8.5 percent, and will be completely eliminated by 2018. American microbrews are taking advantage of the benefits of the KOURS FTA and KoToday, Korea is one of the top five rean's new interest in craft beer, and fastest growing markets for craft expanding their presence in the Kobeers according to the Brewers As- rean marketplace. sociation, with 3.4 percent growth in U.S. Korea Connect, Vol 5 ·Issue 5 ·May 2016
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Florida / Korea Report Most Recent Florida/Korea Trade Data
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FLORIDA-KOREA TRADE The total merchandise trade with South Korea in $millions 2013 2014 2015 2013-2015 (%change) Total Trade 1,545.2 2,130.0 2,221.1 43.7 Florida Exports 251.8 342.6 268.1 6.5 Florida Imports 1,293.4 1,787.4 1,953.0 51.0 Note: Total Trade between Florida and Korea has grown almost 44% during the most recent three-year reporting period, while Florida exports grew about 6.5% according to the most recent trade data Available from Enterprise Florida.
Top 10 Florida-Origin Exports to Korea: 1. Fruit & Vegetable Juices 2. Electrical Machinery, Etc. 3. Civilian Aircraft, Engines & Parts 4. Polyamides in Primary Forms 5. Liquid Crystal Devices Nesoi 6. Taps, Cocks, Valves Etc. For Pipes, Tanks Etc. Pts 7. Printing Machinery Including Ink-Jet Machinery 8. Aluminum Waste & Scrap 9. Copper Waste & Scrap 10. Waste & Scrap of Paper or Paperboard
Top 10 Korea Merchandise Exports to Florida: 1. Oil (Not Crude) From Petrol and Bitum Mineral Etc. 2. Motor Cars & Vehicles for Transporting Persons 3. Electric Apparatus for Line Telephony etc., Parts 4. Refrigerators, Freezers, etc.; Heat Pumps Nesoi & parts 5. Parts & Access for Motor Vehicles 6. Exports of Articles Imported For Repairs 7. Tubes, Pipes & Hollow Profiles Nesoi, Iron & Steel 8. Electrical Storage Batteries, Including Separators/parts 9. Medical, Surgical, Dental or Vet Inst, No Elec, Pt 10. Paper & Paperboard, Coated With Kaolin Etc. RI Etc
Florida / Korea Economic Cooperation Committee, Inc. (“FLOR/KOR”)
MAILING ADDRESS: P.O. Box 226647 Miami, FL 33222-6647 TEL: (786) 235-8289 FAX: (786) 235-8290 Visit our website: www.florkor.org
Contact us by e-mail: [email protected]
Newsletter Editor: Dave Woodward, Executive Director Florida-Korea Economic Cooperation Committee Inc. Acknowledgements & disclaimer: We welcome contributions and input from our members and readers, and while every effort is made to report all information accurately, and apologize for any errors or omissions on our part. Please contact us with any suggested revisions or comments. This publication was produced with support from the State of Florida, Department of Economic Opportunity.