A Free Trade Agreement Only Yields Benefits with the Right Documents

The U.S.-Korea trade agreement became official on March 15, 2012.
The Agreement is the United States’ most commercially significant free trade agreement in almost two decades.
This represented a huge benefit to U.S. exporters: almost 80 percent of U.S. exports of consumer and industrial products to Korea entered duty free and, thus, enhancing the competitiveness of those products in the Korea market.
For products entering the U.S. from Korea, this was a benefit to Korean exporters as well as U.S. importers (like my company!): many of the Korean goods could enter the U.S. duty-free; this gave the Korean manufacturers an advantage over other countries, where import duties had to be paid by the U.S. importer.

They could enter duty free, but only if the shipment had the proper Certificate of Origin.

We had one such shipment where one part number had the Korea-US Free Trade Certificate of Origin and the other did not.

On the one that did not, we were charged import duty of 2.5%.

You can see the red item (below) from the entry summary.


We eventually resolved this issue between our Korean supplier and ourselves and we are now importing all parts at 0% duty.

I hope that you are on the look-out for these issues in your company; if it’s happening to you, you’re spending more than you need to!

You can order a copies of Incoterms 2010 by the International Chamber of Commerce at

Good luck!

Click here for a Certificate of Origin used for the Korea-US Free Trade Agreement.

Click the following link for a PRINTER FRIENDLY VERSION of this article: LWL006

About Lenny

Many years of experience in a Fortune 1000 companies, especially in the logistics and I.T. areas of manufacturing companies. Through process improvements and the use of many of the tools mentioned here, I have been able to identify and implement savings opportunities worth up to $10 million. I hope that some of these real-life stories, suggestions and tools can help you!
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