Korea-US Free Trade Agreement Brought Growth for US Grain Sales
The 2012 free trade agreement forged between Korea and the U.S., known as KORUS FTA, has enabled the U.S. Grains Council (USGS) to lift U.S. grain sales.
Through the agreement, tariffs on the bulk of U.S. agricultural products were reduced to zero, and U.S. dried distillers grains with solubles (DDGS) were introduced to Korea’s feed formulations creating the opportunity to increase the sale of U.S. barley and DDGS. In 2014/15 marketing year, U.S. barley sales to Korea grew to reach a value of $1.2 million, and U.S. exports of DDGS to Korea have climbed from a value of $90 million in 2011 to $178 million for the calendar year 2014.
"The FTA significantly enhanced the competitiveness of U.S. barley in the market, and the Council played an important role in connecting local buyers with U.S. suppliers," said Haksoo Kim, USGC director in Korea. "We assisted with an Idaho food barley trade mission during which participants visited importers, distributers and end-users to build relationships that were critical to sales."
KORUS FTA has also given the U.S. an advantage in meeting Korea’s corn demand as competition increases from the Black Sea region and South America. The zero tariff gained for the U.S. through the agreement has kept U.S. shipments steady as top competitors, such as Russia, Brazil and Ukraine, are subject to a 3% tariff.