Benefits by Industry/Sector - Agriculture
A Good Deal for U.S. Agriculture
The U.S.-Korea Free Trade Agreement (KORUS FTA) will provide America's farmers, ranchers, food processors, and the businesses they support with improved access to the Republic of Korea's 49 million consumers. If approved by Congress, this would be the most economically significant trade agreement for the U.S. agricultural sector in 15 years.
U.S.-Korea Free Trade Agreement - Benefits for Agriculture
U.S. Department of Agriculture
- The U.S. is already Korea's top supplier of a broad variety of agricultural exports at $5.6 billion ($6.1 billion including fish and forest products) in 2008, making Korea the fifth largest export market for U.S. farm products. According to USDA, the new agreement is expected to expand those sales even further.
- Almost two-thirds of Korean imports of U.S. farm products will become duty free immediately - including wheat, corn and cotton.
- Market access for beef and pork will be improved with tariffs for the most important pork products phased out by January 1, 2016, and those for beef products (40%), by year 15 of the agreement.
- The U.S meat sector will experience the largest increase in output, and U.S. beef exports will increase by $600 million to $1.8 billion. (USITC)
According to the USDA:
The tariff reductions will help the United States compete against China and Australia, which have increased their presence in Korea's $18.5-billion agriculture market. The KORUS FTA will help the United States compete against Korea's other major agriculture suppliers and help keep the United States on a level playing field with Korea's current free trade partners, such as Chile, and any future FTA partners.
KORUS FTA: Addressing Concerns About Market Access for U.S. Rice
Comprehensiveness of the FTA
Voice of Concern: The exclusion of rice from the tariff elimination schedule in the KORUS FTA means lack of comprehensiveness and sets the precedent for future trade negotiations.
- Under the KORUS FTA, Korea has agreed to eliminate its tariffs on 99.7% of imports from the U.S., which makes the KORUS FTA Korea’s most ambitious free trade agreement. Korea has also made concessions on all other agricultural products, including the most sensitive ones.
- There are already precedents for excluding sensitive products from FTAs. The U.S. has excluded sugar and sugar products from its FTA with Australia and Canada. In addition, recently, the National Milk Producers Federation (NMPF) made a strong request to USTR to exclude dairy products from the TPP tariff concessions schedules.
- Rice in Korea is far more than a commercial product. Average rice farmer has only 2.45 acres for their rice farming. Income from rice accounts for as much as 40% of the whole farming income in Korea. All WTO members have come to an understanding regarding this special situation in Korea, agreeing to the extension of special treatment in 2005.
Market Access Opportunities for U.S. Rice Suppliers
Voice of Concern: The KORUS FTA does not provide any new Korean market access commitments for rice.
- Korea’s commitments on rice imports under the system of Minimum Market Access of WTO have expanded market access opportunity for U.S. rice suppliers substantially.* Korea has been faithfully implementing these commitments by purchasing more than the required amount of U.S. rice every year. In 2009, Korea bought 81,346 metric tons of rice from U.S. suppliers, exceeding the amount that Korea allotted to U.S. suppliers and the country specific quota of 50,076 metric tons.**
*The share of MMA out of domestic rice consumption (1988-90) is scheduled to increase from 4.4% in 2005 to 7.96% in 2014
**Source: Government of the Republic of Korea