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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 Wyoming’s agricultural
products, including beef, vegetables, and wheat and barley. Wyoming’s
agricultural exports to all countries, estimated at $53 million in 2006,
supported about 630 jobs, on and off the farm. These
export sales make an important contribution to the Wyoming farm economy, which
had total cash receipts of $1 billion in 2006.
Beef. The cattle and calf industry accounts for three-fourths of Wyoming
farm cash receipts, with sales of $763 million in 2006. This 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.
Wheat and Barley. In 2006, cash receipts for wheat and barley were $17
million and $13 million, respectively. The state’s wheat and product exports
were estimated at $11 million in 2007. Wyoming’s wheat and barley
producers 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 that will give the United States a tariff
advantage over competitors (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.
Feed Grains. With about $12.8 million in sales in 2006, Wyoming corn
producers will benefit from this agreement.
U.S. exports of corn for feed will be
duty-free immediately. Korea is currently the fourth largest market for U.S.
corn for feed.
The FTA includes a new 93,774-ton duty-free
quota for corn for processing that grows quickly to 393,849 tons by year 7,
after which quantities will be unrestricted.
Vegetables and Pulses. Wyoming exported about $4 million in vegetables in
2007 and this industry will benefit from this FTA.
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.
