The U.S.-South Korea Free Trade Agreement officially takes effect today (March 15), immediately eliminating thousands of tariffs, including nearly two-thirds of those on U.S. agricultural products.
President Obama spoke with Korean President Lee Myung-bak on March 14 about the agreement, expressing appreciation for working together to complete the most commercially significant accord since the North American Free Trade Agreement nearly two decades ago. Meanwhile, U.S. Trade Representative (USTR) Ron Kirk commemorated the effective date of what he called "a landmark deal with an important ally."
The trade accord, passed by Congress in October, initially was negotiated during the Bush administration and was signed by the two countries on June 30, 2007. In December 2010, the Obama administration resolved several outstanding issues, among them provisions facilitating U.S. automobile exports. Agricultural products that will receive immediate duty-free access include wheat, corn, soybeans for crushing, cotton and other processed and high-value agricultural products, such as whey for feed use, hides and skins, cherries, pistachios, almonds, orange and grape juice, and wine. For pork, the current 25 percent tariff on frozen products would be eliminated by Jan. 1, 2016, as would the tariff on some processed frozen pork. The current 22.5 percent tariff on fresh or chilled pork would become duty-free within 10 years. For beef, the trade agreement will phase out tariffs over 15 years. In fiscal year 2010, the United States exported $2 billion in grains and feeds, and $644 million in oilseeds and products to South Korea, which accounted for 54 percent of all agricultural exports to the key Asian market. South Korea already is the fifth largest export market for U.S. agricultural products. It now is the world's 12th largest economy, with a gross domestic product exceeding $1.4 trillion and a population of about 49 million. It
Overall, tariff cuts on goods embodied in the agreement are expected to support an estimated 70,000 U.S. jobs and increase exports to Korea by about $11 billion, according to USTR. Economists project that the U.S.-South Korea Free Trade Agreement will expand two-way trade by 10 percent within five years. Approximately 11 percent -- or about 12 million -- U.S. jobs depend upon exports.
Congress also approved free trade agreements with Panama and Colombia in October, but trade officials still are in negotiations on the implementation of those two accords.