USDA touts Korea pact

Vetter Darci Vetter, USDA under secretary for farm and foreign agricultural services

Free trade with South Korea would be a boon for farmers, officials say

By DAVE WILKINS

Capital Press

BOISE -- Idaho agricultural producers would benefit from a U.S.-Korean Free Trade Agreement, a USDA official said during a visit to the state.

Potato and dairy products -- two of Idaho's top agricultural commodities -- would see significantly expanded market access under the proposed agreement, said Darci Vetter, USDA undersecretary for farm and foreign agricultural services.

Vetter spoke Aug. 25 at a trade and export workshop at the Boise Metro Chamber of Commerce.

U.S. frozen fries would enter duty-free immediately upon implementation of the agreement, eliminating an 18 percent tariff, she said.

Despite its high agricultural tariffs, Korea is the fourth largest market for U.S. frozen fries. The U.S. exported $41 million worth of frozen potato products to Korea in 2009.

Fresh potatoes for chipping would enter duty-free between Dec. 1 and April 30, which is currently when the majority of U.S. chipping potatoes enter Korea.

"That would in effect eliminate a 30 percent tariff on (chipping) potatoes during that period," Vetter said in a separate interview.

The tariff would be phased out over 15 years for shipments made between May 1 and Nov. 30, when Korea's domestic potato crop is available.

It's reasonable to expect both the dollar value and volume of U.S. potato exports to increase if the tariffs disappear, Vetter said.

With a free trade agreement in place, Korea could be a $60 million annual market for U.S. potatoes; $50 million for fries alone, industry officials estimate.

Elimination of the tariff on frozen fries would be a big deal, said John Keeling, executive vice president of the National Potato Council.

"We would be 18 percent more competitive in a market where we have already made some inroads," Keeling said in an interview. "This is something that could really make a difference."

In 2009, 81 percent of the frozen fries imported by Korea came from the United States. That commanding market share would be at risk if a major competitor were to get a zero duty, Keeling said.

Dairy and beef producers also stand to benefit under a free trade agreement with Korea.

Duty-free quotas would be established for cheese, milk powder, food whey and butter.

"It would be a significantly expanded access for dairy that we haven't seen before in their highly protected market," Vetter said.

A free trade agreement would also expand export opportunities for U.S. beef producers through the creation of new tariff rate quotas and preference over competitors, Vetter said.

If approved by the next Congress, the Korean free trade agreement would be the most economically significant trade agreement for the U.S. ag sector in more than 15 years, she said.

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