U.S. Grain Council reaps benefits from South Korean trade pact

KORUS FTA, a 2012 free trade agreement between the United States and South Korea, has proved beneficial for the U.S. and the U.S. Grain Council (USGC).

The USGC opened an office in Seoul in 1972 and has been a major leader in programs to grow Korea’s animal agriculture and corn processing industries.

The KORUS FTA allowed the relationship between U.S. farmers and agribusinesses and Korean buyers to strengthen. As a result of the agreement, most U.S. agricultural products locked in zero tariffs. As a result of the agreement, sales of barely and distiller’s dried grains with solubles (DDGS) have increased.

"The FTA significantly enhanced the competitiveness of U.S. barley in the market, and the Council played an important role in connecting local buyers with U.S. suppliers," Haksoo Kim, USGC director in Korea, said. "We assisted with an Idaho food barley trade mission during which participants visited importers, distributors and end-users to build relationships that were critical to sales."

The U.S. exported DDGS, a duty-free corn co-product, to Korea in 2014 for a total of $178 million, making it the third-largest importer of United States DDGS.

The zero-duty tariff rate from the KORUS FTA gives the U.S. an advantage against Brazil, Russia and Ukraine in corn exports because those countries face a 3 percent duty. Koreans also like to form relationships with the people from whom they buy products, which results in loyalty after they find the product they like best.

"Koreans like to do business based on relationships -- it reaffirms that they are getting a quality product from genuine people," Jim Greif, a Iowa Corn Growers Association director who traveled on a USGC grain quality mission to Korea in June, said.

Kyle Kirby, a farmer from Missouri, also traveled to Korea, where he was faced with questions about flooding in the U.S. that prevented early planting. As he and his fellow farmers reassured the Koreans, he realized how important it was for overseas buyers to have relationships with growers and to receive real time updates from U.S producers.

"We heard nothing but positive news regarding the U.S.-Korea trade relationship," Kirby said. "They want to do business with the United States as they feel we offer the most consistent, steady supply of coarse grains and co-products."