Korea-US FTA to cause snowballing loss to farmers



By Yoon Ja-young



The Korea-U.S. Free trade agreement (KORUS FTA) incurred a $750 million deficit in trade of agricultural goods, with losses expected to snowball in the future, a report showed Wednesday.



Representatives of farmers demanded abolition of the free trade deal with the U.S. and dismissal of the country's top trade negotiator.



"The KORUS FTA scrapped tariffs on 97.9 percent of U.S. agricultural goods. That is the widest opening of the market among FTAs Korea has signed so far," said Han Suk-ho, a director at the Korea Rural Economic Institute, at the public hearing over amendment of the KORUS FTA.



Korea opened most of its agricultural market to the U.S. following the bilateral deal. Han said that Korea's deficit against the U.S. in agricultural goods increased by $750 million since the KORUS FTA took effect.



When comparing the averages of the 2007 to 2011 period to the 2012 to 2016 period, Korea's agricultural exports to the U.S. increased by $190 million, while imports snowballed by $940 million. Imports of beef, port, almonds, cherries and oranges have soared, with U.S. beef taking over half of Korea's beef imports according to the latest data.



On top of the trade deficit, the FTA damaged farmers.



"The soaring imports not only pulled down prices and production of the agricultural items imported from the U.S. but also lowered overall food prices. It led to real prices of other agricultural goods to fall," Han said. He pointed out that many farmers have switched to items that seemed to be safe from the KORUS FTA, but to no avail.



The condition is only likely to worsen for local farmers, according to Han.



"As time goes on, damage to the local agricultural industry will get bigger as the effects of the KORUS FTA as well as other FTAs accumulate."



He said that if the negotiation for amendment of the KORUS FTA aims at balance in mutual interests, Korea should take an aggressive stance that seeks positive effects on agriculture.



At the hearing organized by the trade ministry and the agriculture ministry, farmers demanded that the KORUS FTA should be scrapped



"The farmers are on the verge of going bankrupt due to KORUS FTA. President Moon Jae-in also had told farmers when he was leading the opposition party that it should be scrapped," said Kim Hong-cheol, president of the Hanwoo Association which represents farmers breeding Korean cattle, called hanwoo.



A representative from the Korean Peasants League demanded dismissal of Trade Minister Kim Hyun-chong, pointing out that he agreed to start negotiations for amendment of the deal without analyzing the economic effects of the KORUS FTA first.



Experts say that Korea should take an aggressive stance in agriculture since the U.S. is reaping a huge trade surplus in that sector.



"The U.S. is also aware that agriculture is both a politically and socially sensitive issue in Korea. It is likely to demand further opening of the market to use it as a tactic to decrease the trade deficit in other sectors," said Im Jeong-bin, a professor at Seoul National University.



"If the U.S. demands further opening of the agriculture market, we will also have to demand revisions on the irrationalities of the deal," said Kim Kyeong-kyu, a deputy minister for the agriculture ministry.

