On June 30, 2007, the United States and South Korea signed the Korea-U.S. (KORUS) Free Trade Agreement (FTA). The agreement, which took effect in March 2012, gave the United States access to Korea’s trillion-dollar economy and more than 51 million consumers. Prior to KORUS taking effect, U.S. pork exports to South Korea were subject to tariffs of 25 percent on frozen pork product and 22.5 percent on fresh and chilled pork product. But under KORUS, South Korean import duties on most U.S. pork cuts of commercial significance were lowered to zero on Jan. 1, 2016. Reverting to pre-KORUS tariffs would be very harmful to U.S. pork producers. The U.S. pork industry would likely lose the South Korean market to its largest competitors that have current FTAs, including Australia, Canada, Chile and the European Union. According to Iowa State University economist Dermot Hayes, U.S. live hog prices would fall by 3.8 percent — or by $4.71 per animal — essentially eliminating the expected gross margin per animal for U.S. producers in 2017.
The KORUS Free Trade Agreement has been a success for U.S. pork producers. Any disruption in sales to South Korea will cause disastrous financial harm to U.S. pork producers, so it is imperative that the U.S. pork industry maintain market access to Asia’s fourth largest economy.
- In 2016, U.S pork exports topped $6.4 billion
- Exports added $53 — that’s 36 percent of the $149 average value of a hog — to every U.S. hog marketed in 2017
- South Korea is the number five export market for U.S. pork
- In 2017, the U.S exported 173,000 metric tons of pork — more than $475 million — to South Korea
- Exports of U.S. pork to South Korea for 2017 totaled more than 173,000 metric tons valued at more than $475 million