By DAVE BLOWER JR.
Farm World Editor

WASHINGTON, D.C. — Officials from the Obama Administration and from the Republic or Korea (South Korea) agreed in principal to a free-trade pact that may open up U.S. farm goods to 49 million consumers in the Asian nation.

Although the deal also includes manufactured goods and other products, USDA Secretary Tom Vilsack believes America’s farmers could benefit the most. “Agriculture has a great deal to gain from the trade agreement with Korea,” Vilsack explained. “U.S. agricultural exports to South Korea were valued at nearly $5 billion in fiscal year 2010. This agreement will open the market even more for U.S. agriculture.”

He said the new pact, which will still need ratified by Congress, renews momentum in pursuit of more open trade with nations that share economic, cultural and social values with the United States.
Korea already has trade agreements in place with Chile, India and 10 other Asian nations. Korea is in negotiations on free-trade pacts with Canada, Australia, New Zealand and China.

“The U.S. agreement with Korea will put U.S. farmers, ranchers and agribusinesses on a more level playing field with competitors around the world,” Vilsack added. “USDA stands ready to assist U.S. exporters in obtaining immediate and prolonged gains from this agreement.”

U.S. Sen. Richard Lugar supports the agreement. “I am encouraged by the latest developments on the U.S.-Korea Free Trade Agreement and look forward to reviewing this agreement and its potential to increase markets for Hoosier and U.S. made goods, services and agricultural products,” said Lugar, who is the Ranking Member of the Senate Foreign Relations Committee.

Grain growers like deal

“Korea is an important market for U.S. grains exports, benefiting U.S. producers of barley, corn, sorghum and their co-products,” said U.S. Grains Council Chairman Terry Vinduska. “During the first nine months of this calendar year, Korea imported 8.6 million metric tons of feed grains, with the United States enjoying a 70 percent market share.”

The FTA provides that feed corn will receive immediate duty-free treatment. In 2010, South Korea imported 351,389 metric tons of U.S. dried distillers grains (DDGS). In addition, The FTA provides immediate duty-free access for DDGS into the Korean market. Korea’s WTO-bound rate for DDGS is now 6.6 percent.

“We are very pleased to see the Korea FTA moving forward,” said Bart Schott, President of the National Corn Growers Assoc. “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.”

Livestock producers cautious

The deal isn’t everything the National Pork Producers Council wanted, but it’s close enough, said NPPC President Sam Carney, a pork producer from Adair, Iowa.

The U.S.-South Korea FTA had been held up mostly because of issues related to trade in beef and automobiles. The logjam was broken when U.S. pork producers agreed to move back the effective date on the zero tariff rate on some cuts of pork to Jan. 1, 2016. “With the date for a zero tariff on pork moved back, we likely will lose some market share in the South Korean market to Chile,” Carney said. “But as the lowest-cost producer of pork in the world, we’ll hold our own. We still will go to zero six months prior to the EU.”

The FTA still must be approved by Congress as well as the South Korean National Assembly.