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What type of impact would a potential Korea-U.S. free trade agreement have on U.S. agriculture?
According to the U.S. Department of Agriculture, a Korea-US (KORUS) free trade agreement would provide American agriculture with improved access to Korea’s $1 trillion economy and 49 million consumers. In 2009, Korea was the third-largest market for US corn. As a result of a free trade agreement, most U.S. agricultural products would become duty-free.
Korea’s 40 percent tariff on U.S. beef will be eliminated over 15 years. By 2014, more than 90 percent of pork exports will be duty-free. If the United States does not finalize the FTA with Korea, total U.S. market share (30 percent) will quickly erode and be replaced by other countries.
Can you gauge public opinion in Korea on the feelings of a free trade agreement between the two countries?
Korea is an important trading nation. Exports, which account for about 45 percent of the economy, have been the primary catalyst of the nation’s economic growth. This growth will continue to be spearheaded by exports in the coming years. In my opinion, nearly all Koreans see the KORUS free trade agreement as a tremendous opportunity for expansion of the nation’s economy.
Korea imported more than double the amount of DDGS thus far in 2010 compared to the same period last year. Do you foresee the market for DDGS in Korea to continue this upward trend?
Korea imported 357,000 metric tons of distiller’s dried grains with solubles (DDGS) from the United States during the first nine months of 2010, representing a 59 percent increase over the 224,000 tons imported during the first nine months of 2009. A substantial increase in Korea’s importation of U.S. DDGS is expected in the years to come.
About one-fourth of commercial mixed feed manufacturers and four-fifths of total mixed ration mixers have never tried the product in livestock and poultry diets. Of those who have tried the product, most have not continued to use DDGS, and only a few have incorporated the products, at currently accepted levels, into their feed formulations. The primary reason for this limited use is lack of knowledge or experience in the product characteristics, particularly in its feeding and financial value. As the local feed industry becomes fully educated on the true value of the product, the demand for U.S. DDGS will expand significantly in Korea, up to about 2 million tons a year. The Council will play an important role in the awareness and education of the significant impact of DDGS in this region.
Other than the emergence of the DDGS market, what is the biggest opportunity for the United States in Korea?
Korea has historically been the world’s second or third-largest feed grain import market. The nation’s feed grains imports reached about 10.2 million tons in 2009, including 7.3 million tons of corn, with 80 percent of Korea’s corn import market coming from the United States. Although the nation’s grain imports may not expand substantially in coming years, it will remain a significant market for U.S. corn.