Government Procurement in the United States– Korea Free Trade Agreement: Great Opportunities for Both Sides?

Hong-Sik (Justin) Chung | June 22, 2014

Abstract: The Free Trade Agreement entered into between the United States and the Republic of Korea (KORUS FTA) contains government procurement provisions in Chapter 17. Although each respective procurement market has already been opened to the other party under the WTO Government Procurement Agreement, this access has been very limited, not only because the market has traditionally been exclusive against foreign suppliers, but also because there were several preferential regulations and policies for domestic firms in the course of awarding procurement contracts. This Article analyzes how Chapter 17 of the KORUS FTA expands upon the WTO Government Procurement Agreement with the hope of bringing Korean firms greater access to the U.S. procurement market and vice versa. It also examines relevant U.S. and Korean statutes and regulations to see how foreign procurement is made and whether there are any barriers to the other side’s firms. With this analysis, the Article explores better and more efficient ways in which Korean and U.S. firms could further increase government contracts with the other side’s government. The Article asserts that the KORFUS FTA will bring, relatively, more benefits to Korean firms. Further, because most of the commodities made in the United States are not quite competitive in terms of price as compared with those of Korea in the procurement market, any interested U.S. firms may want to focus on service sectors that are competitive and not dealt with by Korean firms.