June 22, 2007


US pork to benefit from South Korea trade agreement



The free trade agreement (FTA) between South Korea and United States may double US pork exports compared to Japan, America's leading pork export market, according to the National Pork Producers Council (NPPC).


The United States already has a 27 percent share of the total Korean pork import market, the largest foreign pork supplier in the country. Canada has a 20 percent share of the Korean market, Chile, 10 percent and European countries, 40 percent.


Brian Buhr, a professor of applied economics at the University of Minnesota, said the FTA will add nearly US$825 million to the US pork sector in anticipation of additional pork exports. Buhr considered the South Korean deal as the "most economically" important particularly of the price of US live hogs since the North American Free Trade Agreement.


South Korea will absorb 5 percent of total US pork production, and the Korea FTA, when fully implemented, will cause live US hog prices to be US$10 higher than would otherwise have been the case.


The FTA mandates tariffs on all frozen and processed pork products will be eliminated by 2014. Fresh chilled pork will be duty free 10 years after implementation and US pork products currently face tariffs as high as 30 percent.


In addition to ambitious market access gains, South Korea has agreed to accept all pork and pork products from USDA-approved facilities. This provision lessens the likelihood of unfair technical or sanitary barriers, Buhr pointed out.


The trade deal, on which NPPC worked to get favourable treatment for US pork and pork products, is pending a vote by the US Congress. The National Assembly of the Republic of Korea also must approve the pact, which was formally completed April 1.


The trade deal with South Korea was made possible in part because of the effective working relationship between NPPC and the National Pork Checkoff Board and their shared goal of increasing US pork exports.

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