President Donald Trump and South Korea President Moon Jae-in today signed off on the renegotiated U.S.–Korea Free Trade Agreement (KORUS), putting an end to concerns from the U.S. farm sector about possibly losing the six-year old pact that has spurred American agricultural exports.
Shockwaves rippled through the U.S. ag sector last year when Trump threatened to pull out of the agreement that helped boost exports of U.S. beef, pork, wheat, corn, sorghum and other ag commodities. KORUS may have resulted in increased ag exports, but overall the U.S. still imported more than it exported to South Korea.
Trade in cars and car parts were at the heart of the U.S. concerns, but negotiators worked out a preliminary deal for a renegotiated KORUS in March. South Korea agreed to lift its cap on imports of U.S. trucks and allow the U.S. to extend its 25 percent tariff on Korean trucks.
South Korea also agreed to allow U.S. automakers to export 50,000 cars per year to Korea, up from 25,000. It’s unclear if the U.S. will even me able to export that many, though. The biggest year for U.S. auto exports to South Korea was 2016, when 16,400 passenger vehicles were exported, including golf carts, according to the U.S. Census Bureau.
“It was a long time in coming, and it's a basic redoing of the agreement that was done before, which was a very unfair agreement for the United States,” Trump said in a White House press conference with Moon. “And I think that President Moon and myself, we're very happy. It's great for South Korea. It's great for the United States. It's great for both.”
U.S. agriculture industry representatives are just glad that KORUS was saved instead of scrapped.
The U.S. became the largest beef supplier to South Korea in 2016, thanks to falling tariffs under KORUS. U.S. beef exports to South Korea reached about $1.1 billion in 2017, almost double what they had been five years earlier.
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“KORUS is a prime example of how U.S. producers benefit from trade agreements that reduce tariffs and implement science-based standards,” said National Cattlemen's Beef Association President Kevin Kester. “Less than a decade ago, U.S. beef exports to South Korea were severely limited by a 40 percent tariff and a host of non-tariff trade barriers. KORUS tore down those barriers, helping turn South Korea into a leading destination for U.S. beef.”
USDA Secretary Sonny Perdue predicted that the KORUS finalization will lead to more successes.
“I am optimistic that the dominoes will continue to fall: KORUS, then a new NAFTA, and new agreements with the European Union, Japan, and, most notably, China,” he said. “As an avid sportsman, I would say ‘put this one in the bag and keep hunting for more.’”
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