U.S., South Korea Lock Down Trade Deal

It took plenty of work, but late Friday, negotiators from both sides shook hands on a new agreement.

Published on: Dec 3, 2010

A deal that the Obama Administration says could yield billions in new trade, had finally been reached. U.S and South Korean negotiators agreed Friday to a deal and it's the first major free-trade accomplishment of the Adminstration. Ag groups were quick to respond to the news.

The American Meat Institute issued a statement supporting the new agreement. Notes J. Patrick Boyle, president and CEO, AMI: "South Korea is already a major market for U.S. meat. Pork exports in 2010 are expected to exceed $150 million. The tariff reduction schedule for pork will further strengthen the U.S. position in this...growing market."

Boyle notes beef exports are also growing rising from just 233 metric tons in2006 to 56,000 metric tons in 2009. And those exports keep rising. AMI estimated the FTA, when fully implemented, could increase pork and beef exports by $2 billion.

The agreement, which had hung up over beef and auto imports into South Korea, was almost finished when President Obama made his Asia trip in November; but negotiators weren't able to close the deal then. And there's still work left. Negotiators decided to set aside the U.S. demand for free access to the South Korean beef market, leaving in place the country's ban on beef from older U.S. cattle. The agreement does promise elimination of stiff tariffs on U.S. farm products and will open the country to U.S. financial, engineering and other services.

As for the auto "differences" the new agreement will slowly reduce U.S. tariffs on imported South Korean vehicles, and South Korea will exempt up to 25,000 American cars from strict safety standards as long as those cars meet U.S. regulations.

The National Corn Growers also issued a statement on the news. Bart Schott, NCGA president and a Kulm, N.D., growers comments: "The Korean market is very valuable to the American corn farmer and we fully support this FTA. We look forward to working on its passage as soon as possible in the new Congress."