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

tariff concessions that could accrue additional benefits to many vegetable export interests. 197
The report, however, expressed concern about how Korea has used SPS measures in the past
to protect certain industries from import competition; it further noted that preferential FTA
tariff treatment would do little for improved bilateral trade if Korea imposes SPS barriers in
the future. 198
In its report on the FTA, the ATAC for Trade in Processed Foods took no position on the
agreement, but said that it strongly endorses overall trade goals of opening foreign markets,
promoting tourism, trade, and investment, expanding economic opportunities, and
strengthening political stability and national security for all nations. 199 The report also noted
concern about the creation of special rules of origin and about the importance of resolving
existing SPS and TBTs. 200 The report stated that members are particularly concerned that
benefits that would otherwise be gained by processed food exporters would be lost because
of continuing technical trade barriers not addressed in the FTA. The report noted that a
number of U.S. FDA-approved food additives commonly used in the U.S. foodmanufacturing
process are not permitted for use in Korea, and said that this would result in
the denial of entry into the Korean market of foods containing such additives. 201
In its report, the APAC for Trade said that the U.S.-Korea FTA will benefit U.S. farmers
(including vegetable farmers) by increasing their export opportunities following the
elimination of tariff and nontariff barriers. The report also said that priority must be given
to comprehensive agricultural trade reform. 202 It called for the elimination of barriers to trade
in agricultural products for the purpose of improving market opportunities for U.S.
agriculture through fairer and more open trade conditions. 203
Tree Nuts (Pistachios, Almonds, and Walnuts) 204
Assessment
The U.S.-Korea FTA would likely have a significant positive impact on U.S. exports of tree
nuts to Korea. The immediate elimination of Korea’s current high tariffs on certain raw tree
nuts would likely make U.S. tree nuts more price-competitive in the Korean market relative
to other foreign suppliers. The United States is a leading global producer and exporter of tree
nuts, particularly almonds, pistachios, and walnuts, due to their high quality. An increase in
exports of U.S. tree nuts is most likely to benefit producers in California, where the vast
majority of U.S. tree nut production takes place.
197 Ibid., 2-3.
198 Ibid., 4.
199 ATAC for Trade in Processed Foods, Advisory Committee Report, April 27, 2007, 3.
200 Ibid., 4.
201 Ibid., 5.
202 APAC for Trade, Agricultural Policy Advisory Committee for Trade Report, April 27, 2007, 2.
203 Ibid., 3.
204 Chestnuts are not included in this assessment as U.S. production is only a cottage industry and the
MFN rate is free. The products covered in this assessment represent approximately 30 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 less than 1 percent of U.S. imports from Korea in the GTAP “food products n.e.c.”
sector, for 2006.
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