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

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U.S. objectives, and South Korean objectives. The report will be updated as events
warrant.
The KORUS FTA in a Nutshell
The KORUS FTA was the product of much compromise. As negotiators from
both countries stated, each country was able to accomplish some of its objectives, but
neither side got everything it wanted. For example, South Korea made concessions
in agriculture and services while the United States made concessions on rice and
textiles. Yet, U.S. car manufacturers felt that South Korea did not go far enough in
addressing barriers to auto imports and South Korea would have liked to have more
U.S. concessions on trade remedies.
Some highlights of the results of the agreement are provided below. Background
information on a more detailed examination of the agreement’s provisions is
provided in the main sections of this report.
Agriculture
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 import quotas 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. Exports of seven U.S. products (skim and
whole milk powders, evaporated milk, in-season oranges, potatoes for table use,
honey, and identity-preserved soybeans for food use) would be subject to import
quotas that slowly expand in perpetuity.
Much effort went into negotiating provisions covering three agricultural
commodities of export interest to the United States. Under the KORUS FTA, South
Korea agreed to eliminate its 40% tariff on beef muscle meats imported from the
United States over a 15 year period. Also, South Korea would have the right to
impose safeguard tariffs on a temporary basis in response to any potential surge in
imports of U.S. beef meats above specified levels. However, negotiators did not
reach a breakthrough by the end of the talks on the separate but parallel issue of how
to resolve differences on the terms of access for all U.S. beef in a way that would
address Korea’s human health concerns arising from the 2003 discovery of mad cow
disease in the U.S. cattle herd. Sales of U.S. boneless beef from cattle aged less than
30 months, though, did resume in April 2007 under the terms of a separate agreement
reached in early 2006. However, Korean inspectors’ discovery of prohibited cattle
parts in some boxes of shipped beef that did not meet those terms in October 2007
temporarily placed on hold retail sales of U.S. boneless beef. The new South Korean
president, seeking to remove this impediment to congressional consideration of the
KORUS FTA, instructed his negotiators to resolve this longstanding bilateral dispute.
On April 18, 2008, both countries reached an agreement that will allow sales in the
Korean market of boneless and in-bone U.S. beef from all cattle, irrespective of age,
as long as risk materials known to transmit mad cow disease are removed. However,
Korean public concerns about the safety of U.S. beef and strong opposition to this