Senior Fellow James  R. Lilley

America's and Korea's governments signed the most significant free trade agreement since NAFTA--the U.S.-Korea FTA, or KORUS--on June 30.

As former ambassadors to the Republic of Korea, we know that the KORUS FTA represents a historic opportunity for America to not only bolster its bilateral trade and investment ties with one of its largest and most important trading partners, but also to reinforce our countries' vital political and security partnership at a time of dramatic change in Asia.

For more than 50 years, America's political and economic commitment to Asia has contributed to the region's stability and prosperity. Nowhere has our engagement been more positive than with the Republic of Korea. Since the Korean War, the world has witnessed Korea's dramatic rise from war-torn economy to a vibrant democracy supported by a world-class economy. The KORUS FTA will strengthen America's relationship with a longtime ally and enhance our presence and influence in the region.

In dollar terms, the scale of this agreement is enormous. With two-way trade totaling $78 billion last year, Korea is our seventh-largest trading partner. The KORUS FTA will effectively become the third largest free trade area in the world--exceeded only by the European Union and NAFTA--and sets high new benchmarks for bilateral trade agreements.

Under the KORUS FTA, nearly 95% of bilateral trade in consumer and industrial goods will become duty-free in three years, and two-thirds of all U.S. agricultural exports will enter Korea duty-free immediately. The agreement also gives important new market access, rights, and protections to American investors and service industries.

Trade with Korea is important to New York. In 2006 Korea was the state's largest export market; total sales were $1.3 billion. The FTA with Korea will add to those exports. The elimination of tariffs on machinery, computers, electronics, and transportation equipment, New York's main exports to Korea, will stimulate sales.

New York farmers also will benefit from tariff cuts on soybeans and other products. Perhaps most important for New York City, the FTA gives financial services providers full rights to establish themselves in Korea and provide a full range of their services.

The political and strategic arguments for this agreement are equally compelling. Now the world's 12th largest economy, the Republic of Korea is a vibrant democracy whose standards in the areas of labor and environmental protection are similar to our own. Korea is a strong, reliable partner that has provided valuable economic and military support in Vietnam, the Middle East, and Afghanistan. Most notably, in 2005, Korea's military presence in Iraq was the third-largest contingent behind America and Great Britain. The FTA will complement our nations' longstanding military alliance, which continues to deter North Korean aggression as we seek to deal with its nuclear weapons program and build a broader peace on the divided Peninsula.

More broadly, KORUS will underscore our nation's commitment to promote regional stability and will preserve our leadership in the Asia-Pacific region, the world's most dynamic center of economic activity.

The economies of East Asia are rapidly integrating, with such countries as China, Japan, Korea, and India now trading with each other more than they are with the rest of the world. Moreover, they are actively pursuing bilateral and regional free trade arrangements that could leave America on the outside if we do not remain engaged.

The FTA with Korea will help insure that America remains an insider as Asian economies continue to grow and join forces. U.S. exporters, service providers, and investors will have preferential access to Korea's market and an important base for business with the rest of the region.

At the same time, Korea's preferential access to the U.S. market could be a powerful incentive for others in the region, such as Japan, to open their markets to America with a free trade agreement as comprehensive as KORUS.

For all of these reasons, we urge Congress to act quickly to approve this agreement when it is ready for submission this fall. We are well aware that certain American industries feel they are not getting all that they desire in terms of KORUS benefits. However, we are convinced that America, for its own sake, must remain a sizable economic and commercial player in Asia.

Ratification of this agreement is one way to ensure our engagement with a critical ally and with the world's fastest growing region. Furthermore, it will support our fundamental security and economic interests for the future.

James R. Lilley is a senior fellow at AEI.