Hot Potato in KORUS FTA: S. Korea’s Trade Deficit with U.S. Increasing in Primary Sector | BusinessKorea

Tuesday, January 23, 2018

Korea Native Chicken Association Chairman Moon Jung-jin urged the Ministry of Trade, Industry & Energy to repeal the KORUS FTA on December 10.
Korea Native Chicken Association Chairman Moon Jung-jin urged the Ministry of Trade, Industry & Energy to repeal the KORUS FTA on December 10.
Seoul, Korea
12 December 2017 - 10:15am
Jung Suk-yee

South Korea’s agricultural and livestock imports from the United States have increased all the way since the implementation of the Korea-US free trade agreement (KORUS FTA) in March 2012. Under the circumstances, South Korea’s average annual trade deficit in the sector amounted to US$6.7 billion in 2012 to 2016 whereas it had been US$5.95 billion in 2007 to 2011.

The increase in imports has been led by fruits and vegetables, livestock products, and processed foods, which increased 82.6%, 57.8%, and 52.5% during the period, respectively. Meanwhile, cereal imports, which account for almost half of the total primary product imports from the United States, fell 26% amid a decline in local harvest.

According to the Korea Trade Statistics Promotion Institute, U.S. beef imports increased from 106,000 tons to 169,000 tons between 2012 and last year and amounted to 151,000 tons in the first 10 months of this year. In September this year, U.S. beef’s share in the South Korean market reached 47.7%. Likewise, U.S. pork imports rose from 131,000 tons to 149,000 tons between 2012 and last year and reached 125,000 tons in the first 10 months of 2017. Dry milk imports jumped from 19,000 tons to 61,000 tons between 2012 and 2016, too. Cherry, grape, and orange imports increased by 191%, 74.9%, and 36% between 2011 and 2016 as well.

During the ratification of the agreement back in 2011, the South Korean government said that it would protect South Korean farmers by applying a concession period of at least 12 years or seasonal duties to 200 sensitive products such as beef, pork, grapes, cheese and dry milk. In fact, however, few agricultural and livestock products have been protected during the five-year period. “The clauses of the KORUS FTA on long-term tariff elimination have protected few South Korean farmers as the tariff-free import quota has continued to increase,” said Seoul National University professor Lim Jung-bin. 

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