President Obama welcomes President Lee Myung-bak of the Republic of Korea to the White House

In 2010, domestic automakers shipped about 7,500 vehicles to Korea, representing less than one percent of its auto market. To add insult to injury, well over half a million Korean cars were sold here. But that could all change, according to Ford CEO Alan Mulally, who told The Detroit News that a new trade agreement "will open new opportunities for Ford to reach even more Korean customers."

The U.S. - South Korea Trade Agreement was approved by Congress on October 12, while President Obama welcomed President Lee Myung-bak of the Republic of Korea to the White House yesterday.

The United Auto Workers also praised the move, which reduces both Korean and U.S. tariffs. South Korea will immediately cut its tax on U.S. cars from eight percent to four percent, and fully eliminate the tariff in the fifth year of the agreement. The U.S. will continue to tax Korean cars at 2.5 percent until the fifth year, when the tariff will be eliminated. Korea will also eliminate its 10-percent tariff on trucks immediately, while the 25-percent U.S. tariff on trucks will be phased out during the eighth to tenth years of the agreement.

Perhaps more importantly, the agreement also includes a provision to address differing safety and environmental standards. Domestic automakers will now be able to sell vehicles in Korea without certifying them to Korean regulations, under certain limitations. U.S. companies that sell fewer than 25,000 vehicles in Korea will be required to only meet U.S. safety regulations. And as long as American cars are within 19 percent of South Korean standards for fuel economy and emissions they will be considered legal for sale.