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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 West Virginia’s
agricultural products, including poultry and beef. West Virginia’s agricultural
exports to all countries, estimated at $42 million in 2006, supported about 500
jobs, on and off the farm. These export sales make an important
contribution to the West Virginia farm economy, which had total cash receipts of
$450 million in 2006.
Poultry and Egg Products. Broilers are the state’s largest source of farm
cash receipts, with sales of $144 million in 2006, or 32 percent of farm
earnings. Turkey farms add another 10 percent with cash receipts of $44 million.
The state’s poultry and product exports were estimated at $21 million in 2006.
West Virginia poultry producers 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 second largest source of farm
cash receipts in the state with sales of $113 million or 25 percent of farm
earnings in 2006. The industry can 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.
Feed Grains. With exports of feeds and fodders of $7.3 million in 2006
and cash receipts of $6.6 million for corn during that same year, the West
Virginia feed grain industry 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.
