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

estrictions, establishment of an insurance working group, cross-border trade commitments
for insurance and portfolio management, and implementation of the negative list approach,
giving insurance providers latitude to introduce new products without being subject to an
onerous approval process. ACLI noted that in the near term, cost savings to U.S. industry
resulting from the FTA—particularly the data-processing provisions—will likely exceed $50
million, and that in the long term, new market growth resulting from the agreement could
exceed $5 billion.
American Dehydrated Onion and Garlic Association 26
The American Dehydrated Onion and Garlic Association (ADOGA), composed of two
companies accounting for the majority of U.S. dehydrated onion and garlic production,
reported in its written submission to the Commission that it does not support the U.S.-Korea
FTA. ADOGA stated that Korea already has an adequate climate for raising onions and
garlic, has dehydration facilities with capacity for producing dehydrated onions and garlic,
and has exported such products to the United States in the past. According to ADOGA,
Korea has lower costs of production for onions and garlic, and that Korean dehydration
companies have invested in, and have close ties with, the Chinese dehydrated onion and
garlic industry.
ADOGA noted that it is concerned about the likelihood of transshipments of dehydrated
onions and garlic from China through Korea to the United States. While U.S.-Korea FTA
rules of origin may seem strict enough to prevent transshipments, enforcement of the rules
of origin has been lacking. ADOGA also stated that China has been shipping undervalued
dehydrated garlic to the U.S. market in an effort to lower the amount of tariff due and that
enforcement at the U.S. border has been lacking.
According to ADOGA, the Korean market offers little in the way of U.S. dehydrated onion
and garlic export opportunity, principally because the market is already supplied by China.
Also, it noted that U.S. exports to Korea may prove unsuccessful because the existing duties
on Korean imports of U.S. product will be phased out over 15 years and a TRQ snapback
tariff for over-quota products will be 360 percent ad valorem. By contrast, U.S. duties on
imports of dehydrated onions and garlic from Korea, currently 21.3 percent and 29.8 percent,
respectively, will be decreased in five equal installments, and there are no U.S. TRQs on
dehydrated onions or garlic.
American Insurance Association 27
The American Insurance Association (AIA) stated in a written submission to the
Commission that it represents more than 400 property and casualty insurers operating in the
United States, many of which are active in foreign markets. The AIA said that it fully
supports the U.S.-Korea FTA and urges its approval. According to AIA, the proposed FTA
presents large and commercially meaningful market openings for U.S. insurers in the Korean
market, creates new options for Korean consumers of insurance products, contributes to
26 American Dehydrated Onion and Garlic Association, written submission, June 19, 2007.
27 American Insurance Association, written submission, June 20, 2007.
7-12