Potato industry officials are hailing the United States' recent free trade agreement with South Korea as a $35 million opportunity for domestic potato growers.
"With a $35 million increase in exports at stake, the U.S.-Korea free trade agreement represents a tremendous opportunity for the U.S. potato industry to continue to expand its international footprint," John Keeling, executive vice president and CEO of the National Potato Council, said.
The March 15 agreement resulted in the immediate elimination of South Korea's 18 percent tariff on U.S. frozen potato products. The country also agreed to accept 3,000 metric tons of fresh potatoes from the U.S. in 2012, with the amount increasing 3 percent a year indefinitely.
Tariffs on dehydrated potato products from the U.S. will be eliminated over 11 years and tariffs on fresh potatoes for chipping will be immediately eliminated during the Korean off-season and followed by phased-in duty free access in 15 years.
"There definitely is more interest from dehy companies wanting to invest in the Korean market since the free trade agreement was signed," Frank Muir, president and CEO of the Idaho Potato Commission, said.
South Korea is the fourth-largest frozen potato export market for the United States and a fast-growing one. U.S. potato growers exported $47 million worth of spud products to South Korea in 2010, a 29 percent increase over 2009.
The U.S. already enjoys 81 percent market share in the South Korean frozen fry market.
"The South Korean free trade agreement was very important to us and obviously will allow us to continue to grow the market for U.S. potatoes and potato products," said Chris Voigt, executive director of the Washington State Potato Commission.
The untold story about the agreement, Voigt said, is how the U.S. potato industry would have been impacted had it not been reached. He said the U.S. industry would have lost its current business with that country because of a free trade agreement negotiated between the European Union and South Korea.
"Our products would have been at least 20 percent higher compared to European products if our free trade agreement was not implemented," he said. "We need to keep negotiating free trade agreements around the world if we hope to keep our food processing jobs here in the U.S."
SOURCE: Sean Ellis, Capitol Press