U.S., South Korea begin renegotiation of KORUS deal

by Arvin Donley
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WASHINGTON, D.C., U.S. – The United States and South Korea formally began to renegotiate the U.S.-Korea Free Trade Agreement (KORUS) on Jan. 5 in Washington, D.C.

 

The agreement, which was signed in 2007, eliminated tariffs and other barriers to trading on items like agricultural products, cars and industrial goods. In 2016, trade between the two countries totaled $150 billion and South Korea is now the sixth biggest U.S. trading partner.

But U.S. President Donald Trump has been critical of the deal, saying that the agreement has led to a reduction in U.S. trade. On several occasions he has threated to withdraw the United States from the agreement.

According to the U.S. Grains Council (USGC), the KORUS agreement has offered key market access provisions for U.S. feed grains and co-products, including duty-free access for U.S. corn and sorghum exports. The agreement also includes a 2,500-tonne, duty-free quota for U.S. barley, which increases 2% each year while full tariffs are phased out, as well as important provisions offering increasing market access for beef, pork and poultry products.

As a result, U.S. exports of feed grains in all forms to South Korea have steadily increased, reaching 8.32 million tonnes in 2016-17, a 57% increase year over year, USGC said. In addition, 96% of feed millers in South Korea include U.S. distiller’s dried grains with solubles (DDGS) in their rations for the country’s livestock and poultry industries.

The USGC noted that South Korea has existing free trade agreements with 52 countries, and the Korean government is also actively looking at trade agreements with both MERCOSUR (South America’s trading bloc) and Russia, meaning the United States needs the market access provided by KORUS to remain competitive in the Korean market.

The United States is also in negotiations with Canada and Mexico to revised terms of the North American Free Trade Agreement (NAFTA), which has helped the United States quadruple agricultural exports to those two countries since the deal was signed in 1994.

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