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FACT
SHEET:
U.S.-Korea Free Trade
Agreement -
Pennsylvania Farmers Will Benefit
September 2008
Printer Friendly Version
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 Pennsylvania’s
agricultural products, including dairy, beef, mushrooms, and poultry.
Pennsylvania’s agricultural exports to all countries, estimated at $1.4 billion
in 2006, supported about 16,034 jobs, on and off the
farm. These export sales make an important contribution to the Pennsylvania farm
economy, which had total cash receipts of $4.7 billion in 2006.
Dairy. With farm cash
receipts of $1.6 billion in 2006 or 33 percent of the state’s total, the
Pennsylvania dairy industry 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. The cattle and calf industry generated cash receipts of $466
million in 2006 and is the second largest source of cash receipts in the state.
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.
Mushrooms. As the state’s fourth largest source of farm cash receipts
with sales totaling $389 million in 2006, Pennsylvania mushroom growers will
benefit from this agreement.
Korea’s 30-percent tariff on dried mushrooms will be phased out over a
5-year period. This will give U.S. exporters of these products improved
access to the $10 million Korean dried mushroom import market.
Most other types of mushrooms will have tariffs phased out over 10
years.
Poultry and Egg Products. The broiler industry’s farm cash receipts
totaled $321 million in 2006 and the industry will benefit from this agreement.
Korea’s tariffs of 18 to 27 percent on frozen leg quarters, frozen
breasts and wings, and frozen turkey cuts, will be phased out in 7 to 12
years.
As the number 2 market for U.S. egg products, Korean tariffs of 27
percent on egg products, including egg yolks, will be phased out in 12 equal
annual reductions.
Grape Juice and Wine. Korea’s tariffs of 45 percent on grape juice and 15
percent on wine will be eliminated immediately under the FTA, and Pennsylvania’s
producers of these beverages will benefit as a result of this new market access.
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.
Back to the
U.S.–Korea Free Trade
Agreement
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