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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 Mexico’s
agricultural products, including dairy, beef, and tree nuts. New Mexico’s
agricultural exports to all countries, estimated at $248 million in 2006,
supported about 2,900 jobs, on and off the farm. These
export sales make an important contribution to the New Mexico farm economy,
which had total cash receipts of $2.5 billion in 2006.
Dairy. As the state’s leading agricultural industry with cash receipts of
$912 million in 2006, the dairy industry accounted for 37 percent of the state’s
total. The New Mexico dairy industry, also the top export earner, will benefit
from this FTA.
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. New Mexico’s cattle and calf industry also accounted for cash
receipts of $905 million in 2006. The 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.
Tree Nuts. Pecans are New Mexico’s fourth largest source of farm cash
receipts, and the state is the nation’s fourth largest exporter of tree nuts.
Tree nut farmers will benefit from this agreement.
Current duties on tree nuts range from 8 to
45 percent.
Almonds and pistachios will become duty free
immediately.
Shelled walnuts will be duty free within 6
years.
The 30 percent tariffs on pecans and pine
nuts will be phased out over 7 and 15 years, respectively.
Cotton. New Mexico’s cotton industry, with cash receipts of $40 million
in 2006, will benefit from this agreement.
The FTA will lock in the duty-free access
being enjoyed by U.S. cotton exporters. This permanent access allows U.S.
cotton exports to continue to compete on a level playing field with Korea’s
other trading partners.
