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 Nevada’s agricultural
products, including beef, dairy, and vegetables. Nevada’s agricultural exports
to all countries, estimated at $44 million in 2006, supported about 520
jobs, on and off the farm. These export sales make an important
contribution to the Nevada farm economy, which had total cash receipts of $447
million in 2006.
Beef. As the state’s top source of farm cash receipts with earnings of
$192 million in 2006, or 40 percent of the state’s revenue, the cattle and calf
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.
Dairy. The dairy industry provides the third largest source of farm cash
receipts with earnings of $69 million in 2006. This industry will benefit from
this agreement.
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.
Vegetables. Nevada farmers’ earnings from potatoes totaled $13 million in
2006. The state’s fresh and processed vegetable exports were estimated at $11.4
million in 2006. This industry will benefit from this agreement.
Tariffs on 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.
