Cost savings through the annual duty reduction of 2.7 percent could help boost U.S. exports to Korea to well over $1 billion/year over the 15-year phase-out period (2011 exports valued at $686 million and 2015 exports were valued at $810 million).
The FTA means:
- Duties of 40 percent to zero by 2026, over 15 years.
- Duties are reduced by 2.7 percent each year.
- Beef variety meat: duties of 18 percent to zero by 2026, over 15 years.
- Beef Tariff Schedule
- U.S. Beef Exports to South Korea
The Australia-Korea FTA was implemented in Dec 2014, and duties on beef cuts will be eliminated by 2028.
Due to U.S.-South Korea FTA, U.S. pork and variety meat exports to South Korea increased from $190 million in 2010 to $421 million in 2012 and $470 million in 2015.
Duties on U.S. pork (22.5 percent on chilled pork and 25 percent on frozen pork) will be phased out:
- To zero by January 1, 2016 for “frozen other” (the category which accounts for the largest share of U.S. exports).
- To zero by January 1, 2014 for frozen bellies and other bone-in frozen cuts, most offal (from 18%) and most processed products (reduced from 27% or 30% for most products) .
- To zero over 10 years for chilled cuts, with a safeguard.
- Sausages initially 18% for 1601.00.1000 were phased to zero by 2016 (most trade occurs under this category).
- Sausages initially 30% for 1601.00.9000 were phased to zero by 2014.
The EU-Korea FTA was implemented in July 2011, a time when all suppliers were benefiting from duty-free TRQs to help alleviate Korea’s high pork prices following FMD culling. Duties on EU bellies (the most traded item) will be eliminated over 10 years (by 2021). Duties on other frozen cuts will be eliminated in July 2016.
The Canada-Korea FTA was implemented in January 2015 and duties on most frozen cuts will be eliminated by 2019, with frozen bellies and boneless chilled pork eliminated by 2027.