A free trade agreement (FTA) between the United States and Korea, commonly known as the KORUS FTA, that entered into force in 2012 has offered opportunities for the US Grains Council (USGC) to further develop sales to a mature customer with a historic preference for US grain products.
The Council has been active in Korea since opening an office in Seoul in 1972, and the country remains one of US agriculture’s most important markets. USGC-Korea programmes have been instrumental in the growth of the country’s animal agriculture and corn processing industries. As a result of the agreement, most US agricultural products locked in zero tariffs, solidifying the long-standing relationship between US farmers and agribusinesses and Korean buyers and end-users of grain and offering new room for sales of barley and distiller’s dried grains with solubles (DDGS) to expand.
The FTA gives US barley imports duty-free treatment and, since its implementation, the country’s purchases of US barley have grown quickly, totalling $1.2 million during the 2014/2015 marketing year. “The FTA significantly enhanced the competitiveness of US barley in the market, and the Council played an important role in connecting local buyers with US suppliers,” said Haksoo Kim, USGC director in Korea. “We assisted with an Idaho food barley trade mission during which participants visited importers, distributors and end-users to build relationships that were critical to sales.”
The emergence of US DDGS into the Korean feed formulations was another opportunity gained through the FTA, which allows the corn co-product to enter the market duty free. US suppliers shipped $90 million worth of DDGS to Korea in 2011. Since then, Korea’s purchases have grown, and the market has become the third largest for USDDGS with $178 million worth bought in calendar year 2014.
Read the full news item on the website of US Grains.