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[Excerpt] This U.S. employment impact report was prepared pursuant to section 2102(c)(5) of the Trade Act of 2002. Section 2102(c)(5) requires the President to review and report to the Congress on the impact of future trade agreements on U.S. employment and labor markets. This report describes the relevant provisions of the United States – Korea Free Trade Agreement (KORUS), including a summary of the labor provisions, and assesses the potential employment effects of the KORUS.

Although the KORUS is expected to improve the competitiveness of U.S. exports to the Republic of Korea (Korea) when tariffs are removed on a wide range of products, the major finding of this report is that the agreement is not expected to have a significant effect on aggregate employment in the United States. General equilibrium simulations of the agreement find an overall employment impact ranging from negligible to an increase of 280,000 jobs, depending on whether the U.S. labor market is assumed to be at full employment (no net gain in jobs) or high unemployment (potential net gain). The limited impact on the U.S. labor market is attributable to: (i) the large size of the U.S. economy relative to the economy of Korea; (ii) the relatively small share of U.S. trade with Korea relative to U.S. global trade; (iii) the fact that possible employment losses in some industries are likely to be offset by employment increases in other industries; (iv) provisions in the KORUS for the gradual removal of U.S. tariffs on import-sensitive goods from Korea over an extended period; and (v) safeguards contained in the KORUS to attenuate the effects of certain increases in imports.


Suggested Citation
U.S. Department of Labor. (2011). Report on the U.S. employment impact of the United States - Korea Free Trade Agreement. Washington, D.C.: Author.