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

Noncitrus Fruit 87
Views of Interested Parties
In its report, the ATAC on Trade in Fruits and Vegetables stated that it is generally
supportive of the agreement and noted that it has long called for an FTA with Korea. 85 The
ATAC expressed its preference to either phase out, within a reasonable period of time, the
“permanent” seasonal 50 percent duty on U.S. oranges (September 1–March 1) or
substantially increase the annual quota allowed by the TRQ beyond the limited 3 percent
increase. The ATAC also expressed concern with the manner in which Korea has historically
used SPS measures to protect its domestic producers from competition with imports, and
urged that Korea commit to use sound science in the application of these measures. The
ATAC added that the USDA and the USTR need to remain “vigilant regarding possible
future SPS conflicts” and need to act on them as soon as they are identified.
In a submission to the USTR, Florida citrus growers, including Florida Citrus Mutual
(FCM), stated that they have long been concerned that, although the Florida citrus industry
does not compete directly with Korea’s specialized domestic production of Unshu mandarin
oranges, Korea nevertheless “rigidly protects its domestic Unshu industry,” and thus has
been a difficult market for U.S. citrus exporters to access. 86 Korea, they reported, is a large
and growing market for exports of fresh citrus from the United States, and U.S. citrus
products enjoy strong consumer recognition and acceptance in Korea. The growers noted
that Korea’s tariffs on U.S. fresh citrus remain very high, and in addition, some of Korea’s
SPS measures against fresh citrus from the United States have been “unreasonable” and have
severely restricted trade. FCM commented that, while it recognizes Korea’s right to
safeguard the health of its population as well as its domestic mandarin industry, excessive
SPS measures, in conjunction with Korea’s very high citrus tariffs, have unfairly inhibited
U.S. citrus exports to that growing market. FCM stated that it would support an FTA with
Korea, but only if Korea significantly reduces its citrus tariffs and refrains from imposing
unfair and unscientific SPS measures on U.S. citrus products. FCM said that it has always
found the Caribfly Protocol troubling, applied by Korea as an SPS measure, because there
is no scientific evidence that Caribbean fruit flies are harmful in nontropical climates like
Korea’s.
Assessment
The FTA would likely result in increased exports of U.S. noncitrus fruit as a result of tariff
elimination, quota reduction or elimination and the establishment of a committee to address
SPS issues. 88 Korea’s average import duty on U.S. agricultural products is about 52 percent
85 ATAC on Trade in Fruits and Vegetables, Advisory Committee Report, April 2007.
86 Barnes, Richardson, and Colburn (counsel), written submission to the Trade Policy Staff Committee,
Office of the USTR on behalf of the Florida Citrus Mutual, Florida Citrus Packers, Gulf Citrus Growers
Assoc., and Indian River Citrus League, March 24, 2006.
87 The products covered in this assessment represent approximately 8 percent of U.S. exports to Korea in
the GTAP “vegetables, fruit, nuts” and less than 1 percent of the “food products n.e.c.” sectors, and represent
approximately 81 percent of U.S. imports from Korea in the GTAP “vegetables, fruit, nuts” sector, for 2006.
88 For additional analysis regarding SPS and other NTMs, see chap. 5 of this report.
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