An initial round of trade negotiations between the U.S. and South Korea in early June has "significant implications" for the device and diagnostics industry, AdvaMed said June 27.
The relationship between the U.S. and South Korea produced nearly $72 billion in trade in 2005. The U.S.-Korea Free Trade Agreement (KORUS FTA) will set precedents for the future, said AdvaMed, which noted that the device and pharmaceutical industries have been a focus of "longstanding trade problems" between the two countries.
South Korea "still maintains tariffs as high as 13 percent," Nancy Travis, AdvaMed's associate vice president for global strategy, said. While that rate is "not terribly high," industry "feels very strongly there should be no tariffs on lifesaving products," she said.
Diagnostic reagents are the No. 1 medical technology export from the U.S. to South Korea, representing a $60 million market in 2005, Travis noted. While the Koreans don't tax those products, they place an 8 percent tariff on catheters, X-rays and ultrasound machines, and polarizing material for eyeglasses, she said.
"If that tariff were reduced to zero, we estimate an immediate savings of $20 million" for U.S. exporters, as well as a savings in treatment costs for Korean patients.