Ag shippers await next steps in U.S.-South Korea trade relations
Agriculture shippers are eager for Capitol Hill lawmakers to approve the pending U.S.-South Korea free trade agreement now that the South Korean government has agreed to accept imports of American beef products.
“While this is momentous news for the U.S. beef industry, it also clears one of the major obstacles to the approval of a formal free trade agreement between our two nations,” said Philip M. Seng, president and chief executive officer of the U.S. Meat Export Federation, in a statement.
Once the free trade agreement is ratified, and the current 40 percent tariffs on U.S. beef are lifted, the U.S. Department of Agriculture expects the country’s beef exporters to South Korea will save about $500 million a year in import tariffs. The U.S. International Trade Commission estimates that the free trade agreement will increase U.S. beef exports to South Korea by $600 million to $1.8 billion.
Other types of ag shippers also expect trade benefits from a finalized U.S.-South Korea free trade pact.
The Washington-based Corn Refiners Association said tariffs on all refined corn products will be phased out under the free trade deal, which will create new market access for U.S. corn sweetners, corn oil, and processed animal feeds such as corn gluten feed and corn gluten meal. The agreement also provides immediate market access for exports of cornstarch and modified starches made by U.S. corn refiners, the trade group said.
South Korea closed its borders to U.S. beef shipments in late December 2003 after the USDA confirmed a case of bovine spongiform encephalopathy (BSE), or “mad cow” disease, in a Washington state cow. Prior to the ban, South Korea imported between $3.5 billion and $4 billion in U.S. beef shipments annually, making the country the third-largest imported of this commodity, according to the USDA.
South Korea had temporarily opened its borders to U.S. beef in 2007. During those five months the market was open, U.S. ag shippers exported 53.4 million pounds valued at $117.3 of boneless beef from cattle under 30 months of age.
Under the new beef agreement, South Korea will allow the import of all U.S. beef from cattle under 30 months of age, including bone-in beef. ' Chris Gillis