Expect more raisins and other California products in South Korea

McClatchy NewspapersMarch 15, 2012 

WASHINGTON — The San Joaquin Valley's famed dancing raisins can kick up their heels at the prospect of entering South Korea free of a tariff ball-and-chain.

Following years of negotiations and frustrations, a long-awaited free trade pact binding South Korea and the United States formally took effect Thursday. From the get-go, California farmers expect to reap big benefits.

"California raisins already have a high market share in Korea, but there is definitely room for growth, for more people to buy raisins, so the price coming down should help," said Chris Rosander, international programs coordinator for the Fresno-based Raisin Administrative Committee.

South Korean duties are now gone on raisins, almonds and wine, among other California products. California wine, for instance, will no longer be burdened by a 15 percent tariff. Raisins no longer have an 8 percent tariff.

All told, two-thirds of U.S. farm products now are free of South Korean tariffs. Even with tariffs, the United States exported more than $5.3 billion worth of agricultural products to the thriving Asian country in 2010.

"This will certainly open some more doors," said Bruce Blodgett, executive director of the San Joaquin County Farm Bureau in California. "As we get to the marketing season, that's where we're going to see the impact, hopefully."

For other crops, such as lemons, dried plums and carrots, the South Korea tariffs are dropping and eventually will phase out altogether, most within 10 years. The 40 percent beef tariff will phase out over 15 years.

Until the trade deal took effect, the average South Korean tariff on U.S. agricultural products was 52 percent.

"Today is a monumental day for American farmers and ranchers," Agriculture Secretary Tom Vilsack said Thursday.

Seeing immediate opportunity, the Fresno Center for International Trade Development already has scheduled an agricultural trade mission to South Korea and China in June. The trip is focusing on specialty crops.

Separately, Rosander noted that the Raisin Administrative Committee already has an industry representative based in Seoul, helping promote the product with events such as visiting South Korean schools accompanied by a character in dancing raisin costume.

"The kids seem to like it," Rosander said.

First negotiated under the George W. Bush administration, the South Korea trade deal goes well beyond agriculture.

Within the next five years, tariffs will be eliminated on 95 percent of industrial and consumer goods flowing between the two countries. Non-tariff barriers will likewise fall, covering everything from strict Korean auto safety standards to easier access for U.S. banks and investors.

California firms already export about $8 billion worth of products to South Korea annually, with computer and electronic products accounting for about one-quarter of the total. Korea is the state's fifth largest export market.

This trade deal, like many, has been a long time in the making.

As early as 2001, the U.S. International Trade Commission was asked by lawmakers to study the consequences of a potential South Korea free-trade pact. That initial 192-page study concluded that "the largest gains" from such a deal would occur in agriculture.

A follow-up study in 2007 predicted U.S. exports to South Korea would increase by about $10 billion annually once the deal is in full force, with dairy products projected to be particularly big winners. Domestic U.S. job losses would be "negligible" even as U.S. imports increase by about $6.5 billion, the trade commission predicted.

Viewed skeptically by some politically potent U.S. labor and environmental groups, the trade deal initially signed in June 2007 stalled until last year, when it won approval by wide margins in both the House and Senate.

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