According to the U.S. Department of Agriculture (USDA), the U.S. average exports to South Korea have increased from $5.4 billion in the three-year period before KORUS implementation (2009-11) to $6.37 billion in the three years following (2014-16). As additional tariffs are phased out, U.S. agricultural exports to South Korea will grow further.
In July, the Office of the U.S. Trade Representative (USTR) is reexamining the U.S.-Korea Free Trade Agreement (KORUS) by formally notifying South Korea the United States will call a special joint committee meeting to discuss the trade agreement and consider changes. U.S. grain groups are urging U.S. President Donald Trump and his administration not to withdraw from KORUS.
“Due to the cyclical nature of agriculture and its susceptibility to climatic events, pests and disease, U.S. agricultural exports to South Korea got off to a slow start in the early years of KORUS,” the USDA said. “The United States’ two largest exports, corn and beef, declined in the initial years of implementation for reasons unrelated to the agreement. U.S. corn production suffered from the historic 2012-13 drought and, as a result, U.S. corn exports to the world fell from 45 million tonnes in 2011 to 23 million tonnes in 2013.”
After the recovery of U.S. corn production and exports, the USDA noted that U.S. corn regained its competitive edge in South Korea as well, with exports rising 40%, from 3.4 million tonnes in 2015 to 4.8 million tonnes in 2016. U.S. corn exports to Korea were valued at $865 million in 2016. Despite improvement in corn exports to Korea, the United States is facing strong competition from South American countries that have had record harvests in recent years.
Graph courtesy of USDA.
U.S. Wheat Associates (USW), the National Association of Wheat Growers (NAWG) and the U.S. Grains Council (USGC) all believe the withdrawal from the trade agreement would negatively impact the U.S. agriculture sector and give other countries an opening.
With a population of 51 million and a growing middle class, South Korea continues to be one of the top destinations for U.S. agricultural goods, ranking as the United States’ sixth-largest market in 2016, according to the USDA. The United States is South Korea’s top agricultural supplier, providing 28% of the country’s farm imports.
In a show of support for trade the NCGA and USGC traveled to South Korea to work with customers and government officials at a time when uncertainty surrounds the U.S. corn industry’s top markets.
The joint mission in South Korea met with top-level officials and buyers, including the Korean Trade Minister, in addition to visiting with local cooperatives and trade officials as well as a local farm using U.S. grains, a grocery store and a major port. During meetings, team members discussed the importance of KORUS as well as grain quality and promotion, the NCGA said.
Exports of feed grains to South Korea totaled 8.32 million tonnes in the 2016-17 marketing year. The nation was the third largest buyer of U.S. corn in the marketing year, setting a six-year high. It was also the third largest buyer of U.S. distillers dried grains with solubles (DDGS).