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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 South Carolina’s
agricultural products, including poultry and beef. South Carolina’s agricultural
exports to all countries, estimated at $482 million in 2006, supported about
5,700 jobs, on and off the farm. These export sales
make an important contribution to the South Carolina farm economy, which had
total cash receipts of $1.9 billion in 2006.
Poultry. With farm cash receipts of $563 million in 2006, broilers are
South Carolina’s leading agricultural industry accounting for nearly one-third
of total farm earnings. Turkey production accounted for another 9 percent with
cash receipts of $178 million. Poultry and products are also the state’s top
agricultural export with sales estimated at $83 million. South Carolina’s
poultry 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,
Korea’s tariffs of 27 percent on egg products, including egg yolks, will be
phased out in 12 equal annual reductions.
Beef. The cattle and calf industry is the state’s fourth largest source
of farm cash receipts with earnings of $141 million in 2006. The cattle 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.
Cotton. South Carolina’s cotton industry, with farm cash receipts of $105
million in 2006, was also the state’s top agricultural exporter during that
year. The industry will benefit from this agreement.
The FTA will lock in the duty-free access
being enjoyed by U.S. cotton exporters. This permanent access allows U.S.
cotton exports to continue to compete on a level playing field with Korea’s
other trading partners.
Feed Grains. Producers of feed corn, with farm cash receipts of $66
million in 2006, 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.
