The free-trade agreement between South Korea and the United States may take effect by February next year, according to South Korean Trade Minister Kim Jong-hoon. Previously, the two countries had set a Jan. 1 target for implementation of the trade deal.
The South Korean trade minister cited the need for “more time to complete procedures”, according to a report from Yonhap News Agency. Korean Finance Minister Bahk Jae-wan said the delay in implementation of the trade agreement was due to measures agreed upon by ruling and opposition parties to limit possible fallout due to cheaper U.S. imports. The measures call for giving more subsidies to South Korean farmers.
South Korea is an increasingly important destination for U.S. pork exports, which remained strong in October reaching 161,000 metric tons valued at $418.1 million, according to the U.S. Meat Export Federation. Exports to Korea have been bolstered this year by duty-free access for some imported pork cuts and a severe shortage of domestic product. Once the Korea-U.S. FTA is implemented, duties of 25 percent on the most commonly traded U.S. cuts will be reduced to 16 percent.
“The free trade agreement with South Korea, which should take effect in the first half of 2012, will expand our opportunities with this key trading partner,” said USMEF President and CEO Philip Seng. “It is important to keep in mind, however, that the business climate for imported pork in Korea has been exceptional this year due to foot-and-mouth disease-related shortages and some degree of duty-free access.
The United States used to be Korea’s biggest trading partner. But since 2003, has fallen to fourth place – behind China, Japan and the European Union. Once fully implemented, the U.S.-Korea trade agreement is expected to expand total U.S. agricultural exports by $1.9 billion to $3.8 billion.
Source: Yonhap, USMEF, U.S. Trade Representative