For everyone that is a fan of Korean cars they are about to get cheaper for those of you living in the US in five years:
US Trade Representative Ron Kirk
The U.S. and South Korea have reached an agreement on America’s largest trade pact in more than a decade, a highly coveted deal the Obama administration hopes will boost U.S. exports and create tens of thousands of jobs at home.
After a week of marathon negotiations, representatives from both countries broke through a stalemate Friday morning on outstanding issues related to the automobile industry, which have been a sticking point in the talks. The agreement would be the largest U.S. trade deal since the 1994 North American Free Trade Agreement, or NAFTA, with Canada and Mexico and would bolster U.S. ties with the fast-growing South Korea economy.
South Korea is agreeing to allow the U.S. to lift a 2.5 percent tariff on Korean cars in five years, instead of cutting the tariff immediately. The agreement also allows each U.S. automaker to export 25,000 cars to South Korea as long as they meet U.S. federal safety standards and allows the U.S. to continue a 25 percent tariff on trucks for eight years and then phase it out by the 10th year. South Korea would be required to eliminate its 10 percent tariff on U.S. trucks immediately. [Associated Press]
Read the rest at the link, but not everything has been worked out with this agreement yet. For example they haven’t worked out a compromise on US beef. I do wonder how much the recent issues with North Korea went towards the two sides agreeing to get something passed?
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9:31 pm on December 3rd, 2010 1
^^ Probably because Korea is about the size of Indiana. That would be my guess. dws
12:12 am on December 4th, 2010 2
#2 US car makers can ship as many as they want, as long as it meets Korean standards. Cars that do not meet Korean standards but meet US standards are limited to 25,000.
12:14 am on December 4th, 2010 3
#4, you got that right. No problem for Japanese and Europeans to meet Korean standards, but too much trouble for the US who basically whined that it was unfair hidden tariff, huffed, puffed, and rewrote Korean law so that they can get an exception, while others still need to abide by it. Incredibly arrogant American way of "my way or no way" of thinking. That's America for you. Whoever Korean politician who votes for this deal, should be voted out of office.
3:09 am on December 4th, 2010 4
Am I reading this right that the U.S. can only ship 25,000 cars a year to Korea while the Koreans can ship hundreds of thousands to the U.S.? If so, why such a huge discrepancy?
6:59 am on December 4th, 2010 5
#1, I thought English Teachers would be able to read English, I guess not.
Read it again. It says 25,000 US made cars will be exempt from Korean safety regulations. US safety and tax laws on Korean soil.. wow.. how much more arrogant American side can be demanding that, and getting it.
7:05 am on December 4th, 2010 6
#1, The 25K limit for each US automaker is an “exception” – allowing them to sell autos from the US which do NOT have to meet Korean safety standards (the Japanese redo their cars for the Korean market, but I guess it’s too much trouble for the US automakers); there is no limit on US imports which meet the Korean safety standards.
7:18 am on December 4th, 2010 7
It looks like Ford is very happy with the deal. It’s the same company which made huge advertisement against FTA with Korea. Now they’re all for it. Detroit companies are happy, so it must be bad for Korea at the expense of Korean workers. I say “no” to this deal.
7:52 am on December 4th, 2010 8
What is the former Cleveland Cavaliers' head coach doing conducting foreign affairs for the U.S. government? Oh sh-
9:17 am on December 4th, 2010 9
Oh tom … could you please enlighten me on what in Korea has a standard ? You know, those things that set Korea apart from the rest of the world, and make it the envy of the modern world.
9:40 am on December 4th, 2010 10
Obama seems to have finally rejected the silly theory that emissions affect global warming.
10:52 am on December 4th, 2010 11
Korean Safety Regulations = White Envelopes
11:00 am on December 4th, 2010 12
I don't know why US automakers are happy about this. No Koreans will buy American cars. Most American cars don't match Korean tastes.
1:43 pm on December 4th, 2010 13
Since GM bought Daewoo they currently have a Korean model selling in Korea. This agreement will probably cost American jobs. Looks like the US was just trying to pass something to look good. Hopefully congress will reject this deal.
1:51 pm on December 4th, 2010 14
Koreans have been driving American cars for years. Only the names have been changed to protect the innocent. Also, many Koreans DO want American cars but with the 100% VAT markup plus the badass road tax it isn't feasible for most. Truly level the playing field and see what happens.
GM Daewoo now produces vehicles and kits for Chevrolet, Buick, GMC, Opel, Vauxhall, Holden and Suzuki that are offered in more than 150 markets on six continents.
2:12 pm on December 4th, 2010 15
Laporte, VAT is 10 percent (not 100 percent), and it's applied evenly across to all items purchased domestic or foreign. So what's your beef with it? Now you're asking for yet another special treatment from Korea?
2:55 pm on December 4th, 2010 16
Maybe Harley's are considered non essential luxury items which are subject to a luxury tax.
Funny Laporte, but I know several Koreans in Korea who drives $60,000 BMW's and VW's, but none of them want to drive American, they all say American quality is shit. It looks like you're the one who don't know Korean consumers very well. Korean consumers will want to buy it more if the price is higher. Koreans equate high prices with quality. If the price is low, like American cars are, they do not buy them. They buy a Hyundai instead. Because why buy something if the American brand name is shit and Korean buyers still have to go through all the head ache of trying to find parts, and after sales service, etc etc, when for almost the something under the American price, you can buy a Hyundai with better quality? You don't have to worry about after sale service if you buy a Hyundai. If I have to go through the hassles of after sale service problems, then I at least would want the ability to show off my car to my friends and family. You can't even do that with American cars, so what't the point buying them?
2:59 pm on December 4th, 2010 17
The American car design are shit. They're designed for hauling fat people around.
3:09 pm on December 4th, 2010 18
South Korea understands the necessity of cooperation with the US in order to enjoy an economic boom through new industries while competing against countries like China and India. Maybe the speed in which Koreans can get things done will inspire the American leaders to get the country’s economy back onto the right track.
6:54 pm on December 4th, 2010 19
Aren't most Korean cars just copies of cars from other countries? Just Google "Korean cars copy cats", etc.
7:07 pm on December 4th, 2010 20
American cars don’t meet Korean regulated standards on co2 emissions and do not even come close in fuel efficiency. What the US sells are polluting heavy gas drinkers that have poor safety ratings. In other words, the US wants to bypass the regulations so that they can sell their JUNK.
7:16 pm on December 4th, 2010 21
Q: What does GM stand for?
A:
General Mistakes
General Malfunctions
General Misery
Great Mess
General Malpractice
Q: What is the difference between an American in a Ford, and a porcupine?
A: Porcupines have pricks on the outside.
Q: What do you call a Ford at the top of a Hill?
A: A Miracle.
Q: How do you double the value of a Ford?
A: Fill the tank with gas.
Q: What did the Hyundai say to the Ford?
A: Would you like a towe home?
9:04 pm on December 4th, 2010 22
“Koreans DO want American cars”
That’s the biggest joke I’ve ever heard in my whole life.
9:23 pm on December 4th, 2010 23
That’s funny. When I bought my motorcycle from Harley Korea the price was exactly double with taxes. The status of my visa allowed them to not charge me the taxes and the price dropped close to what it would be in the US. So, It was W36,000,000 with taxes and W18,000,000 with the tax waiver. You can do the math. Of course I’m talking only from personal experience what the hell do I know.
And I stand by my statement. I personally know many Koreans who would like to have an American car if they could afford it. I also know quite a few who own American car(s) and drive them. You might want to move back home and get to know your Korean countrymen a bit better. It looks like you are a stranger in a strange land, like those L.A. kyopos.
11:07 pm on December 4th, 2010 24
Hey everybody, look over there, NK is attacking SK. Meanwhile, the FTA passes without a protest. Amazing.
12:03 am on December 5th, 2010 25
who says it passed?
12:36 am on December 5th, 2010 26
Q: "What is the difference between an American in a Ford, and a porcupine?"
A: The porcupine isn't kicking the Korean's ass?
12:53 am on December 5th, 2010 27
"The American car design are shit. They’re designed for hauling fat people around.
"
Aren't Hyundais designed in the US nowadays?
4:10 am on December 5th, 2010 28
American car makers were in a chicken and egg situation. Since they knew, under the current trade situation, they weren't going to sell many cars in Korea, it wasn't worth the cost or effort to customize their cars for the Korean market. Only after they see an open market with opportunities to compete will they modify their builds for Korea, i.e. smaller engine capacities.
5:46 am on December 5th, 2010 29
hey tom … still waiting for examples of all those High Korean standards you are so proud of. Come on tom … you can do it … there must be 1,000's of examples of how Korea's standards out pace the world.
8:47 am on December 5th, 2010 30
Hey Simon, why don't the US reciprocate and allow Korean cars to enter the US with Korean fuel efficiency standards and Korean auto safety specs? After all, it's not level playing field if Korean cars have to expensively modify their car specs to US standards, but the US cars don't have to cater to Korean specs.
No matter because even if this deal passes, it's not going to be Ford, GM, and Chysler who will benefit. It will be the European and Japanese makers who make their cars in the US who will benefit. Korean consumers will snap those cars up because now they're cheaper. Lower prices for American cars won't effect Korean perceptions of American cars. Sorry, but that's the reality.
5:57 am on December 6th, 2010 31
#20
"And I stand by my statement. I personally know many Koreans who would like to have an American car if they could afford it. "
Yes if they can afford gas (8th most expensive gas), have enough $ to go places where you can valet (too big to park), etc etc. Koreans I talk to say they'd rather buy European/Japanese if they have the #.
Ford is deluded to think they can start selling tons of Ford products in SK after FTA is signed. Ford's strongest products just don't meet the needs of the market in SK imo.
6:54 am on December 6th, 2010 32
“And I stand by my statement. I personally know many Koreans who would like to have an American car if they could afford it. ”
I do, too… Cadillac, Corvette, Viper… and other dreams that can't be afforded even if there was no tax, free gas and a year's supply of kimchee.
I don't know any Koreans who want to run out and get a Ford Focus. Whoo-hoo!
I remember some of the complete disconnected-from-reality nonsense the Ford CEO was saying 20 years ago when they were trying to crack the Japanese market. Same thing. American car companies will sell a few high-end cars to Koreans who want to show off something different. They will not be replacing good quality/cheap to service low-end/midrange Korean cars. The end.
In fact, they have no idea how to go about doing that.
After looking at the list of top-selling cars in America this year, I'm not sure even Americans want to buy American cars anymore. Why would Koreans?
8:33 am on December 6th, 2010 33
Leon is right, the tariff doubles the price. I tried to sell a 5 year old Dodge Caravan to a Korean and all I wanted was $14K. By the time he paid the veterans tax, engine tax, and other taxes it would have costs him $28M won. So not quite double, but close.
Tom, in #7 you said "I say “no” to this deal". How did you say no? Did you write congressmen, phone them, start a grass roots movement? Or just complain on this forum that your politicians don't read? Whine over a beer?
My final thought: The U.S. cars should meet Korea Safety regulations, the same as Korean cars have to meet U.S. regulations. A FTA should really be free trade. No tariffs on phones, beef, cars, etc. But then, corea might not be able to compete?
8:46 am on December 6th, 2010 34
"Dodge Caravan to a Korean and all I wanted was $14K. By the time he paid the veterans tax, engine tax, and other taxes it would have costs him $28M won."
Dodge Caravan is huge car with a huge engine. It wasn't taxed because it was American, it was taxed because it's a wasteful piece of junk that shouldn't be driven in places like Korea where fuel is expensive. Same thing would have happened if you sold a Hyundai minivan with a similar engine displacement.
9:03 am on December 6th, 2010 35
Tom, you are only partially correct, as usual. While any car would pay the engine tax, the veterans tax and other taxes were strictly for foreign cars. Again, corea protecting it's market.
9:04 am on December 6th, 2010 36
If you want to answer something Tom, then answer: Do you support truly free trade? No tariffs on anything?
And, what did you do about the FTA that you don't like? Who did you contact? Which assemblyman did you write or call or email?
9:57 am on December 6th, 2010 37
What other taxes are you talking about that are specific to its foreignness? I'd like to know the nature of this car. Was it originally bought through an official Chrysler dealer in Korea, or was it shipped over privately?
This is the first time I heard of "veterans tax". That sounds like it's the US military who are taxing you for some reason.
There are three taxes for vehicles.
Registration Tax which is 5% of the price, and Acquisition tax which 2% of the price.
The Government Bonds tax which is based on engine displacement tax for your Grand Caravan with its large engine, is 20% of the price.
Two points:
1) None of these taxes are because your car is foreign, so stop with your victim mentality. All cars are taxed like that. It's expensive to own a car in Korea, domestic or foreign, period.
2) Even calculating all the above taxes, there's no way your price is doubled due to taxes.
12:38 pm on December 6th, 2010 38
Tom, I've done my research. It was a tax for Korea War Veterans.
I don't have the time or will to answer the rest of your stupid questions: it is what it is, which was the guy needed to pay $28M won. I'm not going to call my ex-wife to find out what the exact breakdown was.
Now, why haven't you answered the other questions? Too tough for you?
Do you support truly free trade? No tariffs on anything?
And, what did you do about the FTA that you don’t like? Who did you contact? Which assemblyman did you write or call or email?
4:11 am on December 7th, 2010 39
lol at miserable soldiers and english teachers acting like they know all about Korea when they cleary are not. Nothing but bunch of LBHs. (LBH=Losers Back Home)
5:15 am on December 7th, 2010 40
"Tom, I’ve done my research. It was a tax for Korea War Veterans."
As I suspected, it was Uncle Sam who was taxing you. Like I said, your story doesn't add up.
"I don’t have the time or will to answer the rest of your stupid questions:"
You can't answer these pertinent questions which you dismiss as "stupid" because you can't period.
"Do you support truly free trade? No tariffs on anything?"
I support free trade, but only with EU. America, no, just because they are useless whiners.
"And, what did you do about the FTA that you don’t like? Who did you contact? Which assemblyman did you write or call or email?"
My vote in the next election is still relevant. And I am planning to hold a candle light vigil in front of the Korean embassy soon.
6:33 am on December 7th, 2010 41
Tom Wrong Again,
Ha Ha "assemblyman" Ha Ha
As Walter would say "Donny, you're out of your element"
8:25 am on December 7th, 2010 42
Let me be clear Tom, it was a tax by the Korean Government for Korean citizen Veterans of the Korean war. Do you get it yet? You CHOSE not to believe it was a tax by the Korean government because you wish to win the point. It was a tax by the Korean government on foreign vehicles. This was over 10 years ago, and maybe its gone now, but it was there. Since you weren't here and can't prove it wrong with anything other than an insult, we'll just assume I'm right.
As far as FTA: you whine all day on this board, but before the FTA was passed you couldn't even find the time to email or call your representative and voice your opinion. I guess you can take credit for endorsing it then, since you didn't oppose it in a meaningful way. Your vote in the last election before FTA was passed might have had more impact than the future election AFTER it was passed.
By comparison, when I heard there was a possibility that they were going to do away with the overseas exemption on taxes in the U.S., I wrote all 100 Senators voicing my opposition. Did it help? Who knows, but I tried and that's more than you've done in your government.