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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 Montana’s agricultural
products, including beef, feed grains, and vegetables. Montana’s exports to all
countries, estimated at $590 million in 2006, supported about 7,500 jobs, both
on and off the farm. These export sales make an important contribution to
Montana’s farm economy, which had total cash receipts of $2.3 billion in 2006.
Beef. Montana’s cattle and calf industry provided the state with $1.1
billion in farm cash receipts in 2006, 48 percent of the state’s total. Cattle
producers 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. Montana is the nation’s third largest exporter of wheat and
products, and earnings from wheat farming are the state’s second largest source
of farm cash receipts.
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.
Barley. Barley ranks as Montana’s third largest source of farm cash
receipts with earnings of $97 million in 2006.
The new 2,500-ton duty-free quota established for unhulled and naked
barley will give the United States a tariff advantage over competitors such
as Australia and China.
The 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.
Vegetables. The state’s fresh and processed vegetable exports were
estimated at $40 million in 2006.
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 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.
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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U.S.–Korea Free Trade
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