California agriculture is a clear free trade winner
What is in this article?:
- In 2010, the value of California farm exports to South Korea was more than $400 million. Given the size of South Korea's economy and the high trade barriers being erased, the accord may do more for farm exports than agreements negotiated for almost 20 years.
Among other findings, the authors report that:
- The top California agricultural exports to South Korea are fresh oranges, with tree nuts, rice, and beef and beef products also in the top five.
- Other California crops that hold a double-digit share of the South Korean market are hay, grape juice and kiwifruit.
- With an import tariff of about 45 percent, South Korean imports of California table grapes, fresh strawberries, fresh apples and lettuce and rice are small, but have great potential for growth.
- South Korea is becoming a major export market for California grapefruit and lemons. Lower tariffs will increase demand.
- The United States is South Koreas only supplier for almonds and the U.S. has more than a 90 percent share of walnuts. The current 8 percent almond tariff will be eliminated and walnut tariffs will be phased out over the next 6 to 15 years.
- Beef products are the top agricultural import (from all sources) into South Korea by value. With the new agreement, the within-quota tariff will fall by 2.7 percent each year, providing a gain for U.S. producers compared to import competitors.
- South Korea has high trade barriers for many dairy products, but with gradual reductions under the new agreement, the market will grow.