The free trade agreement with South Korea was approved by lawmakers there Nov. 22, and U.S. exporters say the pact should further cement the country’s status as a top destination for U.S. fresh fruit.
“Korea becomes a new star in the Asian market,” said Paul Shimizu, president of Jaspo Inc., Bellevue, Wash. “They buy a lot of fruit.”
While Japan used to be the biggest player among Asian importers of U.S. fresh produce, China and South Korea have eclipsed Japan’s and Taiwan’s importance, he said.
Shimizu said South Korea imports mostly U.S. fruit, primarily oranges, grapes, cherries, grapefruit and pomegranates.
Even though South Korea’s population is only one-third of the Japanese population, he said they buy more U.S. oranges.
“Per-capita they buy much more,” Shimizu said.
In addition, he said South Korean importers insist on premium quality, in contrast to the trend in Japan over the past 15 years where consumers have become more price-conscious.
The free trade agreement will benefit several U.S. commodities.
The off-season duty on U.S. grapes will be immediately reduced from 45% to 24% and in four years it will be zero, according to the U.S. Trade Representative’s office.
The trade agreement should have a favorable effect on the 2012 cherry season and beyond, said Mark Powers, vice president of the Northwest Horticultural Council, Yakima, Wash. Apples and pears are not permitted to be exported to South Korea because of phytosanitary barriers.
“There is the whole implementation process that has to occur, and from our perspective we really want to see that happen prior to the next cherry season,” Powers said.
The 24% tariff on U.S. cherries will disappear immediately after implementation, he said.
The earliest the agreement can take effect is Jan. 1, but the process may take several months to complete, he said.
“It is our hope and expectation that by sometime in the spring the free trade agreement will be implemented,” said Mike Wootton, senior vice president of Sunkist Growers Inc., Sherman Oaks, Calif.
He said there will be immediate benefit for some citrus commodities. U.S. oranges imported to South Korea from March 1 to August 31 will see their duty decline from 50% to 30% and then reduced at 5% per year for the following six years. U.S. Oranges entering South Korea from Sept. 1 to the end of February would still be subject to a 50% duty after a small quota is filled, Wootton said.