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The United States concluded free trade negotiations with Korea on April 1,
2007. The U.S.-Korea Free Trade Agreement (KORUS FTA) is the most commercially
significant free trade agreement the United States has negotiated in nearly 20
years.
The KORUS FTA provides immediate elimination of duties on more than 60
percent of current U.S. exports and gives U.S. exporters improved access to the
Korean market for many of the products that have been highly protected. The U.S.
International Trade Commission estimates that annual U.S. agricultural exports
to Korea will increase by a minimum of $1.9 billion upon full implementation of
the agreement.
The agreement eliminates tariffs and other barriers on most agricultural
products, increasing export opportunities for a range of Idaho’s agricultural
products, including dairy, beef, and vegetables. Idaho’s agricultural exports to
all countries, estimated at $1.2 billion in 2007, supported about 12,788
jobs, on and off the farm. These export sales make an important
contribution to the Idaho farm economy, which had total cash receipts of $5.7
billion in 2007.
Dairy. The Idaho dairy industry accounted for 36 percent of the state’s
farm cash receipts at $2 billion in 2007 and Idaho ranks as the nation’s
fourth
largest dairy exporter. This FTA will benefit Idaho dairy producers.
The FTA will provide immediate duty-free
access for double the current export volume of total dairy products.
Duty-free quotas will be established for cheese, skim/whole milk powder,
food whey, and butter.
Current annual U.S. feed whey exports of $8
million will gain duty-free access to the Korean market immediately upon
implementation.
Beef. Idaho’s cattle and calf industry generated cash receipts of $1
billion in 2007, or 20 percent of total farm cash receipts for the state, and
stands to benefit from this FTA.
For beef muscle meats, the FTA provides a
15-year straight-line tariff phase out with a safeguard that begins growing
from 270,000 tons, a quantity that is 17 percent larger than our largest
historical shipments.
Technical consultations continue toward the
goal of allowing imports to take place consistent with World Organization
for Animal Health (OIE) guidelines.
Following the May 2007 decision by the OIE
classifying the United States as a controlled-risk country, Korea has
announced that it will undertake in a timely manner its regulatory process
toward expansion of market access for beef and beef products.
Vegetables and Pulses. As the nation’s third largest exporter of fresh
and processed vegetables with farm cash receipts of $710 million from potato
farming alone in 2007, Idaho’s potato and dried bean and lentil farmers will
benefit from this agreement.
Tariffs on frozen potato fries and chipping
potatoes (during the U.S. potato shipping season) will become duty free
immediately.
A new 3,000-ton duty-free quota for fresh
potatoes and a new 5,000-ton duty-free quota for dehydrated potatoes will
bring opportunities for growers.
The current 27-percent tariff on most pulses
(peas, beans, and other legumes) will be eliminated within 5 years, while
the tariff for lentils will be removed within 10 years.
Wheat and Barley. Idaho is the nation’s 12th largest exporter of wheat
and wheat products and its cash receipts for wheat totaled $455 million in 2007.
Wheat and barley farmers will benefit from this FTA.
An unlimited amount of U.S. wheat for milling
can enter Korea duty free upon implementation of the agreement.
Korea’s imports of U.S. wheat will no longer
be subject to Korea’s 1.8-percent tariff or its autonomous tariff-rate quota
(TRQ) of 1 percent.
Although this tariff differential may be
small, it provides a small tariff advantage when competing against Canada
and Australia.
A new 2,500-ton duty-free quota established
for unhulled and naked barley will give the United States a tariff advantage
over competitors such as Australia and China.
A new 9,000-ton duty-free quota established
for unroasted malt and/or malting barley provides the United States with 10-
and 20-percent tariff advantages, respectively, over our competitors.
