South Korea pact gives growth opportunities

02/28/2012 12:12:00 PM
Tom Karst

Bringing immediate benefits to exporters of cherries, celery, spinach, almonds and other commodities, the U.S.-Korea trade agreement becomes effective March 15.

Two-thirds of U.S. agricultural exports to Korea will become duty-free, including cherries, pistachios, almonds, celery and spinach, according to the Office of the U.S. Trade Representative.

“I think we will start seeing impacts this season with the March 15 entering force date,” said Ken Barbic, senior director for federal government affairs for the Washington, D.C., office for Irvine, Calif.-based Western Growers.

Barbic said there have been no starting dates yet set for trade agreements with Colombia and Panama, which were also passed by Congress last year.

South Korea’s imports of U.S. fruits and vegetables — $254 million and $9 million in 2011, respectively — is just a fraction of the nearly $7 billion in U.S. agricultural goods the country bought that year. U,S. nut exports were $189 million in 2011.

But the trade agreement will create immediate opportunities to build on those numbers.

“The U.S.-Korea Free Trade Agreement represents a welcome opportunity for members of the specialty crop industry in California and Arizona,” Tom Nassif, Western Growers president, said in a news release.

A 24% tariff on U.S. cherries will disappear immediately.

South Korea also buys oranges, grapes, grapefruit and pomegranates from the U.S. Apples and pears are denied entry for phytosanitary reasons.

The trade agreement reduces the off-season duty on U.S. grapes from 45% to 24%, and in four years it will be zero, according to the U.S. Trade Representative’s office.

U.S. oranges exported to South Korea from March 1 to August 31 will see a decline in duties from 50% to 30%, and it will be reduced 5% a year for the next six years. U.S. oranges entering South Korea from Sept. 1 to the end of February are subject to a 50% duty after a small tariff-free quota is met.

The tariff on U.S. lemons drops from 30% to 15%, and then to zero in the second year. The 30% tariff on grapefruit will be gradually phased out over six years.

The stiff 144% duty on mandarins will be phased out over 15 years.

Meanwhile, the agreement provides a duty-free quota of 3,000 metric tons for table stock potatoes. The agreement also eliminates tariffs on eggplant, celery, cucumbers, spinach and processed tomatoes, among other commodities.



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