U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

enefit under the provisions of this FTA as tariff reductions improve the U.S.
competitiveness in the Korean market. The U.S. industry has noted, however, that several
TBTs, such as restrictive food standards, numerous labeling requirements, and timeconsuming
customs procedures, have impeded U.S. exports to Korea for the past several
years. 266 Interpretation and implementation of the SPS and TBT provisions of the FTA will
likely be critical to fully realizing these market access gains. 267
Despite the NTMs, exports to Korea of most of the processed foods included here have
experienced continued strong growth for the past several years (table 3.12). The food
consumption patterns of the Korean consumer have become very similar to those of U.S.
consumers because of increasing per capita income, increasing participation of women in the
workforce, and a younger, well-traveled generation that is familiar with U.S. brands. 268 The
domestic processing industry has insufficient capacity to supply this increasing demand for
processed foods, and imports are expected to increase. For products included in this
assessment, the United States has been one of the leading suppliers to Korea during the years
2002 through 2006; China, the EU, and Japan represent the other major sources. 269 Korea’s
total imports of all of these products have shown consistent growth, and the United States
has a significant market share for mixes and doughs, tomato ketchup, and food preparations
(table 3.12).
Table 3.12 Korean imports of selected processed foods
Total From the United States
2002 2006 2002–06
change
266 Thorn, “Public Comments Regarding Proposed Free Trade Agreement with the Republic of Korea,”
written submission to the Trade Policy Staff Committee, Office of the USTR, March 17, 2006; USTR,
“Korea,” 2007 National Trade Estimate Report on Foreign Trade Barriers, April 2, 2007, 359–61; and
USDA, FAS, “Republic of Korea Exporter Guide Annual 2006,” October 2, 7–11. For additional analysis
regarding customs administration provisions of the FTA, see chap. 5 of this report.
267 For additional analysis regarding TBTs, customs administration, and NTMs, see chap. 5 of this report.
268 USDA, FAS, “Republic of Korea Exporter Guide Annual 2006,” October 2, 2006, 3.
269 Global Trade Information Services, World Trade Atlas Database.
3-46
2002 2006 2002–06
change
U.S. share
of Korean
imports
Product
Million dollars Percent Million dollars Percent
Mixes and doughs 4.8 17.1 254 3.4 11.5 241 67
Malt extract 26.2 34.8 33 2.0 2.5 26 7
Cookies 2.6 3.0 16 0.0 0.0 N/A 0
Bread, pastry 54.1 99.5 84 16.4 25.2 54 25
Tomato ketchup 3.4 5.3 57 2.6 3.9 46 74
Sauces and condiments 64.8 92.9 43 7.9 9.8 23 11
Soups and broths 6.5 28.1 334 1.9 2.6 43 9
Food preps, nesoi 273.0 316.8 16 120.0 113.1 (6) 36
Source: Global Trade Information Services, World Trade Atlas Database.
Products in HS chapter 19 (preparations of cereals, flour, starch, or milk; bakers’ wares) have
MFN tariffs ranging from 8 to 36 percent ad valorem (mostly 8 percent), and products in HS