AIA SUPPORTS ADMINISTRATION’S EFFORTS TO ACHIEVE KORUS AGREEMENT
WASHINGTON, DC, June 28, 2010 - The American Insurance Association (AIA) voiced its support of the administration’s intention to complete a Korea-United States (KORUS) Free Trade Agreement. The Obama administration has recently announced that it will attempt to resolve the remaining issues impeding this important trade agreement by the end of this year.
“The KORUS agreement is particularly significant as it sets a new and higher standard for a market that is commercially and strategically very important,” said David Snyder, AIA vice president and associate general counsel. “Virtually every major procedural and substantive trade and regulatory issue is beneficially addressed in this agreement.”
Korea’s insurance market is one of the top ten largest in the world, yet its foreign market share, according to the U.S. International Trade Commission (ITC), is only three percent. An open insurance market in Korea is commercially significant for U.S. companies that want to increase the amount of insurance they presently write in Korea.
According to Snyder, “Our industry is encouraged by the provisions in the agreement that specifically relate to insurance regulation. The KORUS agreement recognizes that regulation of insurers should be transparent and equal regardless of whether the regulation is by government or industry groups and places restraints on the existing government-run insurance system in Korea.”
“Importantly, this agreement is entirely consistent with the global goals for trade expansion reiterated by the G-20 in Toronto this weekend,” Snyder continued. The G-20 has repeatedly emphasized its commitment to preventing trade barriers and protectionism, and cites international trade as one of the most important promoters of growth and development.
The KORUS agreement is in the best financial interests of both countries. “The ITC has estimated that protectionism costs property and casualty insurers nearly $40 billion annually in premiums and related jobs,” said Snyder. “Moreover, the relatively closed nature of Korea’s market is not only harmful to U.S. companies, but also harmful to Korea, both in terms of its domestic market and in terms of undercutting Korea’s goal to be a regional insurance center.”
“We are pleased to see the administration give this exceedingly important trade agreement the attention it deserves. Because it is consistent with the G-20’s position on trade and it is of critical financial importance to both countries, we strongly urge its rapid approval,” Snyder concluded.