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

frozen french fries account for an 80-percent share of the Korean french-fry market already,
and said that the immediate elimination of the 18-percent duty would allow for a significant
expansion of product to that market.
According to APTA, the quota on dehydrated potatoes is small and, together with the snapback
tariff of 304 percent, impedes further shipments of these products to Korea. U.S. firms
have entered this product under a different tariff classification with a lower duty in recent
years, but must first blend this product with other additives for it to be reclassified, which
seriously limits its end uses. APTA added that the implementation of the FTA will also allow
U.S. product to maintain, and even increase, its market share in the highly competitive and
price-sensitive Korean processed-potato market.
Bumble Bee Foods, LLC 30
Bumble Bee Foods stated that it is the nation’s largest brand of seafood, with U.S. facilities
producing canned tuna, among other foods in its written submission to the Commission. It
reported it operates the only remaining tuna cannery in the continental United States (in
Santa Fe Springs, CA) and the only remaining tuna cannery in Puerto Rico (in Mayaguez).
It stated it is one of three U.S. tuna canners (along with StarKist and Chicken of the Sea,
which operate canneries in American Samoa) that together supply more than 85 percent of
tuna consumption in the U.S. market, the largest tuna market in the world.
Bumble Bee Foods stated that it opposes any reductions in U.S. tariffs on tuna from Korea.
It supports the current U.S. duty structure for canned tuna (consisting of an ad valorem tariff
for tuna packed in oil and a tariff-rate quota for tuna packed in water). A rise in low-cost
imports has led to the demise of the U.S. tuna processing industry (since 1979 at least ten
canneries have closed, with a loss of 20,000 jobs). It cannot compete with foreign labor rates
as low as $1.75 per hour compared with hourly labor rates of $11.50 and $7.50 in California
and Puerto Rico, respectively. Korea, according to Bumble Bee, has tuna canning operations
and could easily divert additional shipments to the U.S. market should the proposed U.S.-
Korea FTA lead to the elimination of the U.S. tariffs on canned tuna from Korea. Bumble
Bee remarked that any terms regarding canned tuna in the proposed agreement should
include similar rules of origin as in the Andean Trade Preference Act, where tariff
preferences were given only for tuna harvested by Andean and/or U.S.-flag harvesting
vessels (thereby offering increased market opportunities for the U.S. tuna fleet, now that
most U.S. canneries have closed).
The California Table Grape Commission 31
In a written submission to the Commission, the California Table Grape Commission stated
that it was established by an act of the state’s legislature in 1967 and currently represents
over 500 of California’s fresh-grape growers. The California Table Grape Commission said
that its primary activities are focused around research, trade management, issue management,
education and promotion.
30 Bumble Bee Foods, LLC, written submission, June 21, 2007.
31 California Table Grape Commission, written submission, June 25, 2007.
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