South Korean National Assembly Ratifies FTA; President Signs into Law
Last week the National Assembly of South Korea ratified a free trade agreement with the United States, setting the stage for expanded trade between the two nations that should benefit the U.S. agricultural sector, including beef and pork exports.
“This FTA will yield significant benefits for both sides,” said USMEF President and CEO Philip Seng. “As South Korea’s duties begin to decline, Korean consumers, who have endured extremely high food inflation, will begin to see price relief on U.S. products. And U.S. producers and processors will see expanded opportunities for exports that will add more value per head of livestock.”
The trade pact, which is expected to take effect early next year, is projected to boost U.S. beef exports from $518 million in 2010 to more than $1 billion per year by 2026. Duties on U.S. beef exports will drop from 40 percent to zero over 15 years while duties on beef variety meat will drop from 18 percent to zero over the same time span.
Duties on U.S pork exports to Korea, which now stand at 22.5 percent on chilled pork and 25 percent on frozen pork, will be phased out over two years starting Jan. 1, 2014. The FTA is projected to facilitate more than a doubling of U.S. pork exports to Korea, which reached $190 million in 2010.
On Nov. 29, Korean President Lee Myung-bak signed the legislative package — a total of 14 bills — needed to implement the Korea-U.S. FTA. Ratification of the agreement resulted in some public protests in Seoul, but not on a large scale. Police estimated that about 700 people participated in the most recent protest.
Through the first nine months of 2011, U.S. beef exports to Korea are up 45 percent in volume and 37 percent in value over 2010 levels, reaching 119,044 metric tons (262.4 million pounds) valued at $527.7 million. Korea is still recovering to the beef import levels it reached prior to the discovery of BSE in the United States when U.S exports hit 246,595 metric tons (543.6 million pounds) valued at $815 million.
Pork exports through September are up 139 percent in volume and 189 percent in value versus last year, reaching 153,330 metric tons (338 million pounds) valued at $395.1 million. Pork exports this year have been aided by several rounds of Korean tariff reductions inspired by a severe foot-and-mouth disease (FMD) outbreak there that has led to a one-third reduction in the Korean hog herd.