Overview of U.S.-South Korea Agricultural Trade (CRS Report for Congress)
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| Release Date |
Aug. 8, 2018 |
| Report Number |
R45285 |
| Report Type |
Report |
| Authors |
Jenny Hopkinson |
| Source Agency |
Congressional Research Service |
Summary:
South Korea is an important export market for U.S. agricultural products. In 2017, U.S.
farmers and ranchers sold about $7 billion of goods to South Korea, making it the sixthlargest
export market by value for U.S. agricultural products. Leading U.S. agricultural
exports to South Korea include beef, corn, soybeans, pork, wheat, oranges, nuts, and
cheese. Further, the United States had a trade surplus of more than $6.3 billion in food
and agricultural products with South Korea in 2017.
The trading relationship between the two countries has been governed by the U.S.-South
Korea Free Trade Agreement, known as KORUS, since it took effect in 2012. The bilateral free trade agreement
(FTA) reduces, and in many cases eliminates, tariff and nontariff barriers between the United States and South
Korea. South Korea’s agriculture sector is highly protected—its agricultural tariffs average 57%—but through
KORUS, South Korea immediately granted duty-free status to almost two-thirds of U.S. agricultural product
exports. In March 2018, the Trump Administration and South Korea reached an agreement in principle on
modifications to KORUS. These changes reportedly did not address agricultural provisions.
The value of U.S. agricultural exports to South Korea
almost tripled in nominal dollars between 2000 and
2017, increasing from $2.5 billion to $7 billion. From
2009 to 2011—the three years prior to the
implementation of KORUS—U.S. exports to South
Korea averaged about $5.4 billion. In the three years
following the implementation of the FTA, 2012-2014,
U.S. exports to South Korea averaged about $6
billion—a 12% increase. The value of U.S. exports to
South Korea has continued to grow since then,
averaging about $6.4 billion from 2015 to 2017.
Because South Korea is reliant on food imports and
has a growing middle class, it could be a growth
market for U.S. agricultural exports.
Although market access for U.S. agricultural exports
to South Korea has generally increased under
KORUS, certain issues may prevent the export of
specific products. The Korean government’s policies regarding certain plant pests and diseases have limited
exports of U.S. cherries, potatoes, blueberries, apples, and pears. Further, South Korea’s regulatory system for
genetically engineered crops makes it difficult to introduce certain new U.S. crops. Moreover, long-standing
South Korean protections on rice, which it considers necessary for national food security and which were not
addressed in KORUS, allow imports of only a small amount of U.S. rice. Finally, new rules on pesticide residues
on crops, animal drug residues in meat, and carcinogenicity labeling for alcoholic products also act as potential
barriers to expanding trade in these products.
