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The U.S.-Korea Free Trade Agreement (KORUS FTA) will provide America’s
farmers, ranchers, food processors, and the businesses they support with
improved access to the Republic of Korea’s 49 million consumers. If approved by
Congress, this would be the most economically significant trade agreement for
the U.S. agricultural sector in 15 years.
Under this agreement, more than 60 percent of U.S. agricultural exports will
become duty free immediately. Lower tariffs benefit both U.S. suppliers and
Korea’s consumers. The KORUS FTA will help the United States compete against
Korea’s other major agriculture suppliers and help keep the United States on a
level playing field with Korea’s current free trade partners, such as Chile, and
any future FTA partners.
With the Agreement…
Korea’s tariffs on imports of more than 90 percent of U.S. pork products will
become duty free on January 1, 2014. This includes all frozen pork products and
processed pork products.
Date-certain duty-free access allows for U.S. exports to compete on a level
playing field with other Korean free trading partners. This tariff phaseout
equates to an annual duty savings of more than $3 million in the first year of
implementation based on recent trade values.
Fresh pork bellies and other miscellaneous fresh cuts will receive unlimited
duty-free access starting in year 11 after implementation. A transparent
first-come first-serve safeguard quota for these pork products, starting at
8,250 metric tons, nearly twice the current trade volume, will increase at 6
percent compounded annually for 10 years. Both the within-safeguard duty rate
and over-safeguard duty rate will be phased out over 10 years.
The Trade Situation…
For many years, Korea has been an important market for U.S. pork exporters.
From 2005 through 2007, U.S. suppliers shipped an average 78,000 tons of fresh,
chilled, or frozen pork annually valued at $179 million.
Korea’s 2003 ban on U.S. beef imports created opportunity for pork suppliers,
which U.S. suppliers capitalized on due to an efficient industry and a
competitive dollar. The average U.S. market share from 2005 to 2007 was 25
percent and imports from the United States have more than doubled since 2003.
U.S. pork still faces strong competition from the European Union and Canada,
which have an average 2005 – 2007 market share of 42 percent and 20 percent,
respectively. In addition to Canada and the EU, Chile has become a strong
competitor in the Korean pork market in recent years and is now the fourth
largest supplier to this market. Chile’s gains can be attributed in part to the
recent Chile-Korea Free Trade Agreement.
The Current Market Access Situation….
U.S. pork faces applied tariffs of 25 percent for frozen product and 22.5
percent for fresh or chilled product.
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its
programs and activities on the basis of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, and marital or
family status. (Not all prohibited bases apply to all programs.) Persons with
disabilities who require alternative means for communication of program
information (Braille, large print, audiotape, etc.) should contact USDA
’s
TARGET Center at (202) 720-2600 (voice and TDD).
To file a complaint of discrimination, write USDA, Director, Office of Civil
Rights, Room 326-W, Whitten Building, 1400 Independence Avenue SW, Washington,
DC 20250-9410, or call (202) 720-5964 (voice and TDD). USDA is an equal
opportunity provider and employer.
