FTA Helps U.S. Soy Exports Grow to Korea
- Success Stories
In 2014, the Korea - U.S. (KORUS) Free Trade Agreement (FTA) obligated the Korean government to allocate 25,000 metric tons (MT) of food-grade identity preserved (IP) soybeans in the tariff rate quota (TRQ), allowing Korean soy food processing sectors such as tofu, soy milk, soy sauce and soy paste to import U.S. food-grade IP soybeans free of import duty. This number is equivalent to about 10 percent of the Korean food-soybean imports. To maximize the market share impact of U.S. food-grade IP soybeans imported under KORUS FTA, the U.S. Soybean Export Council (USSEC) has encouraged Korean soy food processors to execute TRQ as much as they are allocated, or transfer surplus of TRQ allocation in one sector to others who need more. One example of these tactics was the Korea food-bean buyers teams sent with funds provided by FMD and MAP to the U.S. Soy Global Trade Exchange in 2013 and 2014. This event provided a platform that facilitated food-soybean trade between Korea and the U.S. Coupled with this FAS-funded marketing program, KORUS FTA turned out to be instrumental for the U.S. to capture a dominant market share of Korean food-soybean imports. In 2014, the U.S. captured an 85 percent market share in the target market with 226,800 MT exported to Korea valued at $161 million. In 2013, the U.S. held an 84 percent market share with 207,300 MT valued at $153 million, with a 67 percent market share with 182,800 MT valued at $120 million in 2012. The ratio of TRQ executed by the Korean soy food processors against allocations increased to 95 percent in 2014 from 60 percent in 2013 and just 35 percent in 2012.