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

Views of Interested Parties
Welch Foods Inc., a Cooperative (Welch’s), in a written submission to the Commission,
expressed support for the provisions of the FTA regarding grape juice. Welch’s expects the
agreement to have a positive economic effect for Welch’s, other U.S. grape producers, and
Korean consumers by immediately eliminating the 45 percent duty on U.S. grape juice
exports. Welch’s said that the main trade barrier to selling more grape juice in Korea has
been Korea’s 45 percent tariff on grape juice concentrate. 285 Welch’s noted that, in 2002 and
2003, total U.S. exports of grape juice to Korea were valued at over $9 million, but then fell
to $6.5 million in 2006 as Argentinian grape juice took a larger share of the Korean grape
juice market.
The Wine Institute and the California Association of Winegrape Growers, in a written
submission to the Commission, reported that it “applauds” the FTA, noting the benefit of
immediate duty-free market access for grape juice concentrates. 286 It added that the FTA
“will greatly enhance the competitive position” of the industry, especially with respect to
Chile, which it noted had substantially increased exports of grape juice concentrates to Korea
after implementation of the Chile-Korea FTA in 2004.
Florida Citrus Mutual, a Florida cooperative representing nearly 10,000 Florida citrus
growers and processors, stated in a media release that it supports the FTA. The release said
that the agreement would phase out the 30 to 54 percent tariff on U.S. orange juice, and
would be beneficial to the Florida citrus industry. 287
In its report, the ATAC for Trade in Processed Foods stated that it takes no position on the
agreement. The committee noted in its report, however, that it strongly endorses the
fundamental U.S. goal of opening markets, and since being formed in 2003, has firmly
supported all comprehensive free trade agreements and trade promotion agreements. The
committee also expressed concern that benefits from tariff reductions could be nullified by
continuing TBTs not addressed in the FTA.
Textiles and Apparel 288
Assessment
The U.S.-Korea FTA would likely result in a significant increase in bilateral U.S.-Korea
trade in textiles and apparel, particularly U.S. imports from Korea. 289 The expected increase
in imports from Korea will likely be concentrated in goods for which Korea is a competitive,
285 Walther (counsel), “U.S.-Korea Free Trade Agreement: Potential Economy-Wide and Selected
Sectoral Effects,” written submission to the USITC on behalf of Welch Foods, June 14, 2007.
286 Clawson and Gore, “Comments to the U.S. International Trade Commission,” written submission to
the USITC on behalf of the Wine Institute and the California Assoc. of Winegrape Growers, June 27, 2007.
287 Florida Citrus Mutual, “U.S.-Korea Free Trade Agreement Could Prove Beneficial for Florida Citrus
(April 9, 2007).”
288 The products covered in this assessment represent 100 percent of U.S. exports to Korea in the GTAP
“textiles” and “wearing apparel” sectors, and represent 100 percent of U.S. imports from Korea in the GTAP
“textiles” and “wearing apparel” sectors, for 2006.
289 A trade report also noted that experts in the Korean textile and apparel industry agree that the Korean
industry would benefit substantially under the FTA. KOFOTI, “Forecast: Impact of FTA,” March 2007, 46.
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