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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 California’s
agricultural products, including dairy, beef, vegetables, fruits, and tree nuts.
California’s agricultural exports to all countries, estimated at $11.3 billion
in 2007, supported about 120,425 jobs, on and off the
farm. These export sales make an important contribution to the California farm
economy, which had total cash receipts of $36.5 billion in 2007.
Fruits and Fruit Products. California is the nation’s leading grower and
exporter of fruit, with exports of fresh and processed fruits valued at nearly
$2.4 billion in 2007.
Fruits and fruit products gaining immediate duty-free access include
cherries, raisins, grape juice, and frozen orange juice.
Many other products such as dried plums, avocados, lemons, and
grapefruit will see duties eliminated in either 2 or 5 years.
For oranges, the FTA establishes front-loaded seasonal (March-August)
tariff cuts that benefit 70 percent of exports through an immediate
reduction in tariffs from 50 to 30 percent and a 7-year phase out. Access
for orange shipments earlier in the year is provided through a duty-free
quota.
A 5-year front-loaded tariff elimination schedule will benefit an
estimated 70 percent of U.S. table grape exports. Tariffs on the remaining
30 percent of grape exports will be eliminated over 17 years.
Tree Nuts. California is the nation’s largest producer and exporter of
tree nuts and has the world’s largest almond industry, which continues to
rapidly expand. California’s tree nut exports totaled $2.8 billion in 2007.
Current duties on tree nuts range from 8 to 45 percent.
Almonds and pistachios will become duty free immediately.
Shelled walnuts will be duty free within 6 years.
Vegetables. As the nation’s leading grower and exporter of vegetables,
California’s vegetable growers and processors will benefit from this agreement.
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 is established for fresh potatoes giving
new access.
Other products such as carrots, lettuce, and sweet corn, with duties
ranging from 30 to 45 percent, will have tariffs phased out in either 5 or
10 years.
Dairy Products. With cash receipts of $7.3 billion in 2007, California’s
dairy industry is the nation’s second largest and the leading exporter with overseas
sales estimated at $566 million.
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.
U.S. feed whey exports will gain duty-free access to the Korean market
immediately.
Beef. With cash receipts of nearly $1.7 billion in 2007, California’s
cattle and calf 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.
Wine. California is home to the nation’s largest wine industry and is the
nation’s number one exporter. California’s wine producers will benefit from the
FTA as all import tariffs on wine in the growing Korean market will be
immediately eliminated.
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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