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 (2010 exports valued at $518 million).
- Duties of 40 percent to zero over 15 years
- Duties are reduced by 2.7 percent each year
- Beef variety meat: duties of 18 percent to zero over 15 years
2010 U.S. pork and variety meat exports to Korea totaled $190 million. The FTA could help more than double this value to more than $400 million by 2016.
Duties on U.S. pork (22.5 percent on chilled pork and 25 percent on frozen pork) will be phased:
- 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 currently 18% for 1601.00.1000 to zero over 5 years (most trade occurs under this category)
- Sausages currently 30% for 1601.00.9000 to zero by 2014
Duties on U.S. pork should be eliminated ahead of the EU-Korea reduction schedule, with duties on EU bellies (the most traded item) eliminated over 10 years. 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.