U.S. and Korea Agree To Free Trade

The United States and the Republic of Korea signed a free trade agreement April 1 that will create economic opportunities for their people and enhance their economic and strategic partnership, according to the U.S. trade representative.

“This is a historic moment for our two countries. The United States-Korea Free Trade Agreement (KORUS-FTA) will provide U.S. farmers, ranchers, manufacturers and service providers exciting new market opportunities in a growing, dynamic country. It will contribute to Korea’s successful transformation to a 21st century economic power," said U.S. Trade Representative Susan Schwab.

"The completion of this landmark agreement is testimony to the industriousness, creativity and determination of our two peoples. It demonstrates that two countries with large, complex economies and robust public involvement in policy debates can work through great challenges to build stronger trade and investment ties."

KORUS-FTA represents the United States’ most commercially significant FTA in more than a decade, she said. Korea is the world’s 10th largest economy, with a GDP of nearly $1 trillion.

The Republic of Korea is the fifth largest export market for U.S. frozen fries, with $23 million in annual sales, according to the National Potato Conference. Korea is also a significant market for U.S. dehydrated potato exports, with more than $1.6 million in sales in 2006. In recent years, U.S. potato farmers have shipped large amounts of fresh potatoes to Korea both for consumption and processing into potato chips. The U.S. potato industry considers the U.S.-Korea Free Trade Agreement the best opportunity to overcome these barriers, expand trade and ensure continued dominant market share for U.S. potato products in the market.

“This is a strong deal for American farmers and ranchers who will gain substantial new access to Korea’s large and prosperous market of 48 million people,” said Karan Bhatia, U.S. trade representative.

Historically, Korea has been one of the most protected agricultural markets in the world. KORUS-FTA will create new export opportunities for American farmers and ranchers by eliminating and phasing out tariffs and quotas on a broad range of products. Under the agreement, more than $1 billion worth of U.S. farm exports to Korea will become duty-free immediately. Most remaining tariffs and quotas will be phased out over the first 10 years the agreement is in force.

Originally posted Thursday, Apr. 5, 2007