USGC welcomes trade agreement between US, South Korea

By U.S. Grains Council | October 03, 2018

Leaders from the United States and South Korea signed an updated United States-Republic of Korea Free Trade Agreement (KORUS) on Sept. 24, a move welcomed by the U.S. Grains Council, a long-time partner with the Korean feed and livestock industries.

Important market access provisions from the original KORUS agreement were preserved in the new agreement, including duty-free access for U.S. corn and sorghum exports. The original agreement also included a 2,500 ton (nearly 115,000 bushels) duty-free quota for U.S. barley, which increases 2 percent each year while full tariffs are phased out, as well as important provisions offering increasing market access for beef, pork and poultry products.

“The KORUS agreement has solidified and enhanced our longtime and fruitful partnership with South Korea,” said Tom Sleight, USGC president and chief executive officer. “U.S. coarse grains and co-products are highly competitive in the South Korean market, and the KORUS agreement sets the foundation for trade so vital to both countries.

“The Council is pleased the United States and South Korea have signed the agreement—continuing the work our country has built over a period of 40 years.”

The Council has worked in South Korea since 1972, offering expertise on how to use corn, distillers dried grains with solubles (DDGS) and, most recently, ethanol. This work has helped spur dynamic growth in the South Korean livestock and feed grains sectors.

South Korea is the third largest importer of grains in all forms in the current marketing year (Sept. 2017-July 2018). Also the third largest importer of U.S. corn, South Korea imported 5.6 million tons (220 million bushels) in 2016/2017, a six-year high, followed by 5.4 million tons (213 million bushels) thus far in the current marketing year, representing a strong 60 percent market share for the United States.

The Council has worked in South Korea since 2004 to promote U.S. DDGS with continued success. The third largest buyer of U.S. DDGS, exports of the feed ingredient to South Korea have already surpassed the 1 million ton mark in 2017/2018 after setting a new record every marketing year since 2010/2011. The Council continues to promote DDGS in South Korea by working to educate existing and potential users to encourage even more DDGS use.

South Korea has also purchased increased amounts of U.S. sorghum, barley and ethanol this marketing year. Notably, South Korea currently ranks as the sixth largest importer of U.S. ethanol despite only importing ethanol for beverage and industrial uses. A recent USGC trade team is part of the effort to provide key South Korean decision-makers the information they need to establish a national blend mandate, further increasing potential for increased ethanol usage.

Learn more about the Council’s work in South Korea here.