Free Trade Agreement - Essay Example

The US will be able to expand its automobile and manufacturing industry into South Korea by the strong economic alliance formed between the two countries. Historically, FTA like the North American Free Trade Agreement has tripled both exports and imports between the member states since tariffs are cheaper. In my view, the FTA would add $ 20 billion to bilateral trade which last year was estimated to level $ 78 billion. The US stands to gain $ 40 billion from the FTA (Cooper, Manyin and Platzer 16).

According to available data for 2006, only 5,000 American manufactured cars enter the South Korea market while 800,000 South Korean cars are imported into the US (Choe 16). The FTA will help in reducing the $ 13 billion US dollar deficit which is attributed to net imports of automobiles. Since the FTA calls for zero tariffs on American auto entering South Korea after the fifty-year, the US auto and manufacturing industry will increase its productivity (Choe 16).The FTA will impose peace and stability in the Middle East.

South Korea is interested in expanding its market into the US since the economy is dependent on exports which account for 70% of the GDP. The US is the second-largest market of South Korea export hence it has sought to gain competitiveness through the FTA. South Korea has in the past imposed high taxation rates on automobile imports hence creating inefficiency in the market which 95% is dominated by the local manufacturers (Cooper, Manyin and Platzer 26). In order to achieve the economic benefits of the FTA, I recommend that you support the FTA.

In case you have any questions or clarifications, please feel free to conduct me at………….I look forward to cooperating with you in supporting the FTA.Sincerely,Your nameAddress