WASHINGTON – Average exports to South Korea increased to $6.37 billion in the three-year period after the US-Korea Trade Agreement (KORUS) went into force in 2012, up from $5.4 billion in the three-year period before the agreement went into force, the Foreign Agricultural Service (FAS) of the US Dept. of Agriculture said in its most recent International Agricultural Trade Report.
The bump in export dollars from US-Korea trade is largely due to tariff reduction and the lifting on non-tariff barriers, FAS reported. Agricultural exports to South Korea will continue to expand as additional tariffs are phased out.
“With a population of 51 million and a growing middle class, South Korea continues to be one of the top destinations for US agricultural goods, ranking as the United States’ sixth-largest market in 2016,” the report stated. “The United States is South Korea’s top agricultural supplier, providing 28 percent of the country’s farm imports.”
Agricultural exports that saw immediate benefits from KORUS implementation include prepared foods and distillers grains. US prepared food exports to South Korea reached $423 million in 2016, an increase of 57 percent since 2011, while distillers grains exports reached $176 million in 2016, up 95 percent compared to 2011, according to FAS.
South Korea is the second-largest importer of US beef and beef products, followed by Japan, with 17 percent of US beef and beef products exported there in 2016. In the two years before KORUS went into force, US beef exports to South Korea surged as South Korea faced its worst outbreak of foot-and-mouth disease in the country’s history.
US beef exports to South Korea fell in 2012, when KORUS was implemented, as domestic herds rebounded. But the trade recovered due to increased price competitiveness and lower duties.
“As a result, US beef and beef product exports to South Korea grew from $806 million in 2015 to $1.1 billion in 2016, an increase of 32 percent,” according to the report. “Beef and beef products remain the top US agricultural exports to South Korea.”
Another positive development in US trade with South Korea is the reopening of the Korean market to US poultry in August. South Korea lifted a ban on US poultry after an outbreak of highly pathogenic avian influenza (HPAI) was reported in Tennessee in March and a nationwide ban on poultry from countries experiencing HPAI outbreaks. The US is negotiating with South Korea on an agreement to implement regional bans so that only poultry from an affected US state would be barred for export to the country, FAS said.
FAS said lifting the HPAI ban provides an opportunity for increasing poultry exports to South Korea at a time when poultry consumption in the country is expected to grow.
“The South Korean chicken industry reports a 5-percent increase in chicken consumption during big sporting events both within and outside the country,” FAS reported. “Not only is South Korea hosting the winter Olympic Games in February 2018, but poultry consumption should also increase as Koreans spend time at home watching the men’s soccer World Cup in Russia in June 2018 and the Asian Games in Indonesia in August 2018.”