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

Views of Interested Parties
The increased market access would likely enhance the price competitiveness of U.S. pork
in the Korean market, especially with respect to pork from Chile, which implemented an
FTA with Korea in 2004 that gives Chile duty-free access to the Korean market beginning
in 2014. 248 Chile is a major competitor with the United States in the Korean market for pork.
Korea provides a market for many cuts that are less popular in the U.S. market. The tariff
phaseout also provides U.S. producers with an opportunity to enhance sales of value-added
products. 249
U.S. poultry exports would likely increase, primarily as a result of tariff elimination under
the FTA. Despite the current tariffs on U.S. poultry exports, the United States exported over
43,000 mt of poultry to Korea in 2006, accounting for a 55 percent market share. Under the
FTA, Korea would phase out the 20 percent tariff on frozen chicken legs, the main chicken
product exported by the United States (globally and to Korea) in ten equal annual stages.
Korea would phase out tariffs on frozen chicken breasts and wings in 12 equal annual stages.
The National Pork Producers Council (NPPC) expressed strong support in a May 2007 press
release for the U.S.-Korea FTA and, stating that the FTA “is the single most important trade
agreement ever for the U.S. pork industry, and it will generate hundreds of millions of
dollars in new export sales.” 250 The NPPC estimates that by the end of the FTA phase-in
period, total U.S. pork exports to Korea will rise to nearly 600,000 mt, which represents
about twice as much as the amount currently shipped to Japan, the largest export market for
U.S. pork.
The National Chicken Council (NCC), in a written submission to the Commission, expressed
support for the FTA and stated that the FTA will enhance the poultry trade by phasing out
import duties on U.S. poultry. The NCC stated that the bilateral agreement concluded on SPS
measures is equally important to the tariff reductions. NCC noted that Korea agreed to
recognize the equivalency of the USDA’s poultry inspection system and to move toward less
restrictive trade arrangements after a detection of highly pathogenic notifiable avian
influenza in U.S. commercial poultry. 251
The National Cattlemen’s Beef Association (NCBA), in a written submission to the
Commission, stated that it would support the FTA if the following issues are resolved: the
Korean market is reopened to U.S. beef, Korea agrees to eliminate tariffs on U.S. beef, and
important SPS issues are resolved. NCBA noted that Korea historically has represented the
third-largest export market for U.S. beef and beef-variety meat, and the prospects for future
growth into Korea are tremendous when taking such factors as exchange rates, economic
growth, and tariff reduction into consideration. 252
In a statement posted to its Web site, the U.S. Meat Exporters Federation (USMEF) stated
that the FTA would be beneficial for U.S. pork exports but that unresolved issues concerning
248 Hayes, “Impact of a U.S.-Korea Free Trade Agreement,” written submission to the USITC,
June 20, 2007.
249 NPPC, written submission to the USITC, posthearing comments, June 27, 2007.
250 Appell, “U.S.-South Korea Trade Deal Best Ever For Pork,” May 25, 2007.
251 National Chicken Council, written submission to the USITC, June 5, 2007.
252 NCBA, “United States-Republic of Korea Free Trade Agreement, Testimony of the National
Cattlemen's Beef Association,” written submission to the USITC, June 20, 2007.
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