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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 York’s agricultural
products, including dairy, fruits, and beef. New York’s exports to all
countries, estimated at $671 million in 2006, supported about 8,600 jobs, both
on and off the farm. These export sales make an important contribution to New
York’s farm economy, which had total cash receipts of $3.5 billion in 2006.
Dairy. The dairy industry accounted for 46 percent of the state’s farm
cash receipts with earnings of $1.6 billion in 2006. New York is the nation’s
third largest exporter of dairy products. Dairy farmers 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.
Fruits and Fruit Products. The fresh and processed fruit industry is
important to the state and will benefit from this agreement.
Grape juice will become immediately duty free eliminating the current
duty of 45 percent.
Many other products such as tart cherries and strawberries will see
duties of 45 percent eliminated in 9 and 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.
Beef. New York’s cattle and calf industry is the state’s fourth largest
source of farm cash receipts with sales of $157 million in 2006. The industry
will 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. New York exported an estimated $71 million in fresh and
processed vegetables in 2007. Potato and other vegetable growers will benefit
from this agreement.
Tariffs on asparagus, canned and processed tomatoes, 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 is established for fresh potatoes.
Other products such as carrots, lettuce, and sweet corn, with duties
ranging from 30 to 45 percent, will have tariffs phased out in either 5 or
10 years.
Wines. As a leading U.S. producer and exporter of wines, New York wine
producers will benefit from this agreement. Wine producers will benefit from the
FTA as all import tariffs on wine in the growing Korean market will be
immediately eliminated.
For questions about the U.S.-Korea Free Trade Agreement and its impact on
U.S. agriculture, please contact FAS Legislative and Public Affairs Office at
(202)720-7115 or
LPA@fas.usda.gov.
For detailed information on how the Agreement benefits specific commodities,
please visit:
http://www.fas.usda.gov/info/factsheets/Korea/us-koreaftafactsheets.asp.
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