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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 New England’s
agricultural products, including dairy, beef, fruits, and vegetables.
Agricultural exports from Delaware, Connecticut, Maine, Vermont, New Hampshire,
and Rhode Island to all countries, estimated at $434 million in 2006, supported
about 4,900 jobs, on and off the farm. These export
sales make an important contribution to the New England farm economy, which had
total cash receipts of $2.3 billion in 2006.
Dairy. New England’s dairy producers will benefit from this FTA, with
cash receipts across all six states reaching $573 million in 2006.
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. The cattle and calf industry of Vermont and New Hampshire generated
cash receipts of $59 million in 2006 and this industry will benefit from this
agreement.
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. With cash receipts of $131 million in 2006, New England’s
potato farmers, located mostly in Maine, 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 sweet corn grown in much of the region
will see its tariffs phased out in 5 years.
Fruits. New England fruit growers, especially those in the blueberry and
apple businesses, will benefit from this agreement.
The 45-percent tariffs on blueberries and
peaches will be phased out over 10 years.
Korea’s tariff of 45 percent on apples (other
than Fuji) and pears (other than Asian varieties) will be eliminated in 10
years. During non-FTA sanitary/phytosanitary discussions, Korea agreed to
proceed on the long-standing U.S. pest risk assessment request.
Maple Products. Producers of maple syrup and maple sugar products stretch
across New England and earned $22 million in cash receipts in 2006. This
industry will benefit from this agreement.
The 8-percent tariff on maple syrup and maple
sugar will be phased out over 5 years.
Distilled Spirits. New England distilled spirits producers, such as those
in Maine producing vodka, will benefit from this agreement.
Korea’s 20-percent tariff on vodka will be
phased out over 5 years.
