The Proposed U.S.-South Korea Free Trade Agreement (KORUS ...

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manufactured goods, were not very controversial and were dealt with in early stages
of the negotiations. Other issues, such as trade in agricultural products and in autos,
were the most difficult and were not resolved until the final hours of the negotiations.
Agriculture and Sanitary and Phytosanitary Issues
Overview. Attaining comprehensive market access for U.S. agricultural
products to South Korea’s large market and finding a way to resolve Korea’s
continued restrictions on U.S. beef purchases (imposed to protect human health
following the late 2003 discovery of mad cow disease in the U.S. cattle herd) were
the two primary objectives pursued by U.S. agricultural negotiators. Though South
Korea in 2006 was the 14 th largest agricultural importer in the world, its farm sector
is highly protected with high tariffs and quotas. 17 This reflects its farmers’
longstanding political influence (particularly that of rice producers) and its urban
population’s deep ties to its rural roots.
In concluding the KORUS FTA, the United States secured nearly complete access
for all U.S. agricultural commodities and food products into Korea’s market.
However, a breakthrough on the beef issue (technically not part of the FTA talks but
nevertheless the subject of high-level discussions) did not occur until June 2008.
This appears to reflect the newly elected Korean President’s view that an agreement
spelling out the rules that apply to beef imports from the United States had to be in
place before President Bush could consider sending this agreement to Capitol Hill.
Several Members of Congress had for months stated that South Korea must agree to
fully reopen its market to U.S. beef under scientifically based international rules and
in commercially significant quantities before Congress considers or approves the
agreement. U.S. agricultural groups, well aware of this deal’s potential benefits for
producers, had also conditioned their support on the resumption of U.S. beef exports.
In 2007, South Korea was the 5 th largest market for U.S. agriculture, as export
sales totaled $3.5 billion. Under the KORUS FTA’s agricultural provisions, South
Korea immediately would grant duty-free status to almost two-thirds of current U.S.
agricultural exports. Tariffs and tariff-rate quotas (TRQs) 18 on most other
agricultural goods would be phased out within 10 years, with the remaining
commodities and products subject to provisions that phase out such protection by
year 23. Seven U.S. products (skim and whole milk powders, evaporated milk,
in-season oranges, potatoes for table use, honey, and identity-preserved soybeans for
17 South Korea’s average applied agricultural tariff (2006) was 48%, compared to about 12%
for the United States. WTO, Statistics Database, “Country Profile for Republic of Korea,”
at [http://stat.wto.org/CountryProfiles/KR_e.htm]; U.S. Department of Agriculture,
Economic Research Service, Profiles of Tariffs in Global Agricultural Markets, AER-796,
January 2001, p. 26.
18 A TRQ is a two-part tool used by countries to protect their more sensitive agricultural and
food products. The quota component provides for duty-free access of a specified quantity
of a commodity, which in an FTA usually expands over time. Imports above this quota are
subject to a prohibitive tariff that in an FTA frequently declines over time. At the end of a
product’s transition period to free trade under an FTA, both the quota and tariff no longer
apply (with a few exceptions), allowing for its unrestricted access to the partner’s market.