More than one year after President Donald Trump asked U.S. Trade Representative (USTR) Robert Lighthizer to initiate discussions to amend the Korea-U.S. Free Trade Agreement (KORUS), a revised version was made official Monday when Trump and South Korea's President Moon Jae-in signed the agreement.
“From day one, I promised the American people that I would renegotiate our trade deals to ensure that our agreements were fair and reciprocal,” Trump said during remarks at the signing ceremony. “For decades, politicians have talked about fixing broken trade deals, only to do absolutely nothing about them. My Administration is the first to actually keep our promise and deliver.”
Trump said the outcome of the new deal gives American-made automobiles, innovative medicines and agricultural crops much better access to the Korean markets
“I think our farmers are going to be extremely happy. It was very limited as to what they could do and what they could send, and now it’s an open market, and they’re going to be sending a lot more farm products," he said. "That makes me feel very good. I love our farmers."
U.S. Agriculture Secretary Sonny Perdue said the revised agreement “is a better deal for the entire United States economy, including the agricultural sector.”
“This agreement adds to the momentum building for President Trump’s approach to trade, which is to stand strong for America’s interests and strike better deals,” Perdue stated. “I am optimistic that the dominoes will continue to fall: KORUS, then a new NAFTA [North American Free Trade Agreement] and new agreements with the European Union, Japan and, most notably, China. As an avid sportsman, I would say, ‘Put this one in the bag, and keep hunting for more.’”
Reassuring news for ag
In a statement, American Farm Bureau Federation president Zippy Duvall said the modernized KORUS preserves a two-way trade relationship that greatly benefits America’s farmers and ranchers and is “much-needed good news and help for our farmers and ranchers as the agricultural economy struggles.”
He noted, “South Korea bought $6.9 billion worth of U.S. agricultural goods last year, making it our sixth-largest export market. Whether it’s corn, soybeans and wheat or poultry, eggs and meat products, our agricultural exports to South Korea are growing thanks to [KORUS].”
Duvall continued, “Securing export markets for our products is critical, and we encourage the Administration to continue to push for conclusion of other trade agreements, such as an updated NAFTA agreement with Canada and Mexico.”
U.S. negotiators should continue pushing to remove barriers to U.S. agricultural trade in other parts of Asia as well, Duvall said, noting that “now would be a good time to take a fresh look at the Trans-Pacific Partnership [TPP], an agreement that Farm Bureau has estimated would boost U.S. agricultural exports by $4 billion per year. Rejoining TPP negotiations would send a clear message to other nations, such as China, that the U.S. is serious about growing key markets for our agricultural products around the world.”
According to the U.S. Meat Export Federation (USMEF), the revised deal means most U.S. pork products will now enter Korea duty free. The duty rate on U.S. beef has also been reduced from 40% to 21.3% and will continue to decline each year until it is eliminated by 2026.
“Signing of the revised KORUS agreement is reassuring news for the U.S. beef and pork industries,” USMEF president and chief executive officer Dan Halstrom stated. “The market access terms secured in the original KORUS not only helped increase U.S. red meat's market share in South Korea but also bolstered consumption by making our beef and pork products more affordable and accessible to Korean consumers.”
USMEF said all major red meat competitors have free trade agreements with Korea, but the U.S. has benefited from KORUS being implemented earlier than most of the other deals, providing the U.S. with a head start on tariff elimination.
“The United States is the largest supplier of beef to Korea and trails only the European Union as the second-largest pork supplier,” Halstrom said. “U.S. red meat exports to Korea set a record last year of $1.7 billion, up 19% year over year and up 69% from 2012, when KORUS entered into force.”
This trend has continued in 2018, he said, with both U.S. beef and pork export value increasing more than 50% compared to a year ago. Korea is now the second-largest value market for U.S. beef and the fourth largest for U.S. pork.
“USMEF thanks our U.S. trade officials for recognizing the importance of the favorable terms included in KORUS and maintaining them in the revised agreement,” Halstrom said.
National Cattlemen's Beef Assn. president Kevin Kester also applauded the Trump Administration for its efforts to secure a new deal.
“KORUS is a prime example of how U.S. producers benefit from trade agreements that reduce tariffs and implement science-based standards,” he said. “Less than a decade ago, U.S. beef exports to South Korea were severely limited by a 40% tariff and a host of non-tariff trade barriers. KORUS tore down those barriers, helping turn South Korea into a leading destination for U.S. beef.”
In fact, he said exports to Korea accounted for more than $1 billion annually over the last two years.
“We applaud President Trump for his leadership in improving KORUS for other sectors, and we know that a modernized KORUS agreement will allow U.S. producers to continue focusing on what we do best: Providing safe, high-quality beef for Korean families to enjoy,” Kester said.