Expanding Business One Year into Free Trade AgreementMarch 15, 2013
Curt Cultice is a Senior Communications Specialist in the International Trade Administration’s Commercial Service.
It’s 8:00 p.m. on a Tuesday evening, and there’s excitement on Jimmy Wu’s face as he hangs up the phone. Cracking a smile, he logs an order for a replacement aircraft engine from Asia. “Business is good and continues to get better,” he says, before picking up the phone to chat with another customer in Latin America.
It’s all in a day’s work for Wu, a native of Shanghai, China, who founded Infinity Air, Inc., in 1997, and serves as its president and CEO. The firm, a Los Angeles-based manufacturer and distributor of new and refurbished aircraft parts for the commercial aerospace industry, serves thousands of customers around the world each year.
Of all the countries in which Infinity Air does business, Wu is particularly impressed with the opportunities in Korea, Infinity Air’s largest export destination. Last year, sales of everything from flight-service controls and engines to interior equipment and cockpit windows to Korea totaled more than $10 million.
In March 2011, the U.S.-Korea Trade Agreement took effect, reducing barriers to trade and putting what Wu calls a “spring in the step” of his business endeavors. Infinity Air is taking advantage of the agreement to expand its business in the country.
“Korea is a huge market for us, and with the trade agreement in place, the market just got a whole lot bigger,” Wu says.
Trade agreements play a large part in America’s recent growth trend in exports. In 2012, a year in which the U.S. achieved exports of $2.2 trillion, exports to trade agreement partners grew at nearly twice the rate of exports to the rest of the world and represented nearly half of all U.S. exports. For the U.S.-Korea agreement, the International Trade Commission estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone will add $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea.
Infinity Air is one of many companies using the agreement to its advantage. Prior to the U.S.-Korea Trade Agreement, servicing Korea’s aviation market required payment of Korean tariffs of up to 15 percent on spare parts. Now, almost 80 percent of U.S. exports of consumer and industrial products to Korea are no longer subject to import duties. Nearly 95 percent of bilateral trade in consumer and industrial products with Korea will become duty free within five years – with most remaining tariffs eliminated within 10 years.
As this trade agreement matures, the International Trade Administration remains ready to help American companies tap into Korea’s $1.1 trillion economy. Whether your company is looking to grow business or seek new opportunities in the market, a visit to export.gov is a great way to start.