### Analysis in Support of Certification that the Rule will not

have a Significant Economic Impact on a Substantial

Number of Small Entities

Proposed Rule

Importation of Fresh Unshu Oranges from Korea to the

Continental United States, 7 CFR 319.28

10

- 022

- 1

U.S. Department of Agriculture

Animal and Plant Health Inspection Service

April 20102



### Summary

The Republic of Korea has requested USDA authorization to resume commercial

shipments of fresh Unshu oranges into the c ontinental United States . An a dministrative

suspension of Korean imports of the fruit into the United States was imposed in 2002

after interceptions of the causal agent of citrus canker. A systems approach would be

used to mitigate pest risks. APHIS has determined that there would be a low risk of pest

introduction into the United States under the proposed rule

.

The impact of Unshu orange imports from Korea is expected to be minimal for

domestic producers. The United States does not commercially produce Unshu oranges,

and price dif

ferences suggest that they are not a close substitute for U.S.

- grown mandarin

varieties , such as tangerines . Effects of the proposed rule in terms of product

displacement may be borne by Japanese exporters, since Japan is currently the other

major supplie r of Unshu oranges to the United States.

E ven if all Unshu orange imports from Korea were to directly replace a portion of

U.S.

- grown tangerine consumption , the effect on U.S. producers would be still

insignificant . Under such a scenario, annual imports o f Unshu oranges from Korea of

2,000 metric tons (the upper limit of the projected range of imports , which would well

surpass the peak import volume of 1,611 metric tons recorded in 2002 ) would displace

only 0.6 percent of fresh tangerines pro duced by U.S. operations in 2008

- 09

. E ven a

small impact such as this for U.S. producers is highly unlikely.

Th e rule would not entail reporting, recordkeeping, or other compliance

requirements beyond those set forth in existing regulations, such as in 7 CFR 319.56

- 6,

which requires that all imported fruits or vegetables be subject to inspection at the port of

first arrival. All costs associated with the proposed field pest control program, labeling,

inspection and certification, and packinghouse procedures, would be i ncurred by the

owner or the agent of the owner of the fruit prior to importation.

Under these circumstances, the Administrator of the Animal and Plant Health

Inspection Service has determined that this action will not have a significant economic

impact o n a substantial number of small entities.3



### Introduction

This analysis provides the basis, as required by the Regulatory Flexibility Act, for

certification by the APHIS Administrator that the proposed rule, if promulgated, will not

have a significant econo mic impact on a substantial number of small entities.

APHIS has received a request from the national plant protection o rganization

(NPPO) of the Republic of Korea (South Korea) to allow the importation of Unshu

oranges ( Citrus reticulata Blanco var. unshu Swingle ) from Cheju Island into the

c ontinental United States. 1 In 1994, APHIS approved the importation of Unshu oranges

produced in Cheju Island into any area of the United States except several citrus

producing States. In 2002, the importation of Unshu oranges from Korea was suspended

due to interceptions of citrus canker during pre

- clearance inspections and subsequent

detections of citrus canker at U.S. ports of entry. 2 In 2007, in response to a request from

Korea, APHIS allowed the importation of Uns hu oranges produced in Cheju Island to

resume , but only to the State of Alaska

. 3 Currently, the regulations (7 CFR 319.28) allow

the importation of Unshu oranges from certain areas in Japan and from Cheju Island in

Korea into the United States under a per mit and after the specified safeguards of a

preclearance program are satisfied.

In 2009, in response to Korea’s request to allow the importation of Unshu oranges

from Cheju Island to the c ontinental United States, APHIS developed a p est r isk analysis

(PR A) using the previous PRA for imports into Alaska as a baseline for pest listing . The

PRA incorporat es new evidence that citrus canker bacteria ( Xanthomonas citri subsp.

citri ) and sweet orange scab fungus ( Elsinoë australis ) are pests of quarantine

signi ficance associated with Unshu oranges. 4 The two pests are rated as having a

medium pest risk potential. P ests receiving a rating within the medium range may

1 In this analysis, we refer to South Korea simply as Korea.

2 Citrus canker is a bacterial disease that affects citrus and is caused by the inf ectious bacterium

Xanthomonas axonopodis pv. citri (also known as Xanthomonas campestris pv. citri and

Xanthomonas citri ) . While not harmful to humans, the disease affects the health and marketability of

infected fruit. http://www.aphis.usda.gov/plant_he alth/plant_pest_info/citruscanker/index.shtml

. 3 Federal Register (FR 72, 60537

- 60541), Docket No. APHIS

- 2006

- 0133, Final Rule: Importation of fresh

Unshu oranges from Korea to Alaska (7 CFR 319.28).

4 “ Importation of Unshu Orange Fruit, Citrus reticulat a that Blanco var. unshu Swingle, from Korea int o

the Continental United States, A qualitative, pathway

- initiated risk analysis ” December 23, 2009 Rev 003,

USDA, APHIS, Center for Plant Health Science and Technology4

require specific phytosanitary measures in addition to standard port

- of

- entry inspection.

The PR A included a risk management document outlining the conditions under which

Unshu oranges from Cheju Island could safely be imported into the c ontinental United

States and Alaska.

APHIS is proposing to include these conditions and requirements in § 319.28 f or

the importation of Unshu oranges from Korea. APHIS is taking this action based on the

determination that there is a low risk of introduction of citrus canker and sweet orange

scab into the United States via imports of fresh Unshu oranges from Cheju Isl and, Korea.

The proposed rule is consistent with World Trade Organization agreements that sanitary

and phytosanitary regulatory restrictions should be based on scientific evidence and

applied only to the extent necessary to protect human, animal, and plan t health.

S pecifically, the proposed rule would amend the regulations concerning the

importation of citrus fruit to remove certain requirements for the importation of Unshu

oranges f rom Korea that are no longer necessary and make those regulations consis tent

with our domestic regulations for citrus canker. W e propose to remov e requirements for

the fruit to be grown in specified canker

- free export areas and for joint inspection in the

groves and packinghouses by the Government of Korea and APHIS . We woul d also

clarify that surface sterilization of the fruit must be conducted using one of the approved

phytosanitary treatments listed in 7 CFR part 305, and w e would extend the area in the

United States where U nshu orange s from Korea may be distributed to inc lude the entire

c ontinental United States , as well as Alaska

. Finally, w e would require that each

shipment be accompanied by a phytosanitary certificate containing an a dditional

d eclaration stating that the fruit was given the required surface sterilizati on and inspected

and found free of sweet orange scab

.



### Potential Impact on Small Entities

This proposed rule may affect domestic mandarin variety growers, especially

those who engage in the production of tangerines

, as well as the importers, wholesalers

and distributors of mandarin varieties

. The United States is not a commercial producer of

Unshu oranges ( Citrus reticulata var. unshu ). The United States produce s other

mandarin varieties of Citrus reticulata , such as tangerines and Satsuma mandarins.

None theless, the action is expected to have minimal economic effect on U.S. entities,5

small or large, given the relatively small impact of current Unshu orange imports from

Japan and Korea. Any increase in the quantity of Unshu oranges from Korea is expected

to be insignificant.

According to the Small Business Administration (SBA) standard, a business

engaged in orange production is considered to be a small entity if its annual receipts are

not more than $750,000. 5 Table 1 summarizes 2007 Census of Agricult ure data for

tangerine growers , and t able 2 summarizes 2007 Census of Agriculture data classified

under “other

- orange ” growers which include all orange varieties other than Valencia

oranges. “ Other orange ” varieties include: navels, tangerines, tange los, temples

, S atsuma

and other mandarin varieties

. Of the “other orange” varieties, t angerines are considered

to be most like Unshu oranges , although they are not close substitutes

.

In 2007, t here were a total of 1,976 tangerine growers . By far

, Florida an d

California are the two largest producers of tangerines, with tangerine growers in Florida

and California accounting for 7 8 percent of the U.S. total and the tangerine acreage in

these two States accounting for 98 percent of the U.S. total

. The se percent ages are

similar for the 9,659 “ other orange ” growers overall , with growers in Florida and

California account ing for 89 percent of the U.S. total and the Florida and California

acreage account ing for 98 percent of the U.S. total. Average annual sales per “other

orange ” grower are estim ated to have been about $102,347 in 2007. 6 Clearly, “other

orange ” growers are predominantly small entities according to the SBA standard of

$750,000.

Table 1

. Number of tangerine growers and acres , by State, 2007

State Nu mber of T angerine G rowers

and P ercentage S hare of U.S.

T otal Tangerine A cres and P ercentage

S hare of U.S. T otal

Florida 839 ( 42 %) 14,604 (39.5 %)

California 706 ( 36 %) 21,528 (58.2 %)

Hawaii 300 (15 %) 87 (0.2 %)

5 U.S. Small Business Administration, Ta ble of Small Business Size Standards.

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf

6 Average sales per entity is based on the number of non

- Valencia orange growers recorded in the 2007

Agricultural Census, i.e., 9,659 operations, and the total value of fresh and processed non

- Valencia oranges

reported in the 2009 USDA

- NASS Citrus fruits 2009 Summary, i.e., $1.2 billion.

http://usd a.mannlib.cornell.edu/usda/current/CitrFrui/CitrFrui

- 09

- 24

- 2009.pdf6

State Nu mber of T angerine G rowers

and P ercentage S hare of U.S.

T otal Tangerine A cres and P ercentage

S hare of U.S. T otal

Texas 59 ( 3 %) 174 (0.5 %)

Arizona 36 (2 %) 544 (1.5 %)

Louisiana 36 (2 %) 28 ( < 0. 1 %)

United States 1,976 (100%) 36,965 (100%)

Sourc e: USDA NASS

, 2007 Census of Agriculture

, T able 32

, Fruits and nuts.

Table 2

. Number of non

- Valencia (“other orange ”) growers and acres , by State. 2007

State Number of non

- Valencia (“Other

O range ”) G rowers and P ercentage

S hare of U.S. T otal Non

- Valencia (“Other Orange”)

A cres and P ercentage S hare of

U.S. total

Florida 4,575 ( 47 %) 264,751 ( 61.3 %)

California 4,052 ( 42 %) 158,263 ( 36.7 %)

Hawaii 407 ( 4 %) 186 (0. 4 %)

Texas 384 ( 4 %) 6,141 ( 1.4 %)

Arizona 118 ( 1 %) 1,718 (0.4 %)

Louisiana 116 ( 1 %) 503 ( 0.1 %)

Alabama 7 ( < 0. 1 %) 6 ( <0.1 %)

United States 9,659 (100%) 431,568 (100%)

Sourc e: USDA NASS

, 2007 Census of Agriculture

, T able 32

, Fruits and nuts.

Ta ble 3 shows the percentages of tangerine growers and tangerine acreage relative

to the total number of “other orange ” growers and acreage in 2007

. In Florida and

California, the two dominant tangerine

- producing States

, tangerine growers comprise d 17

to 18 percent of “other orange ” operations . However, the tangerine acreag e in Florida

was much smaller than in California, i.e.

, 5.5 percent compared to 13.6 percent

,

indicating smaller operations in Florida , on average

. The number of tangerine growers

and th e total tangerine acreage in Hawaii comprise d large shares of that State’s “other

orange” operations and acreage, 73.7 percent and 46.8 percent respectively.

Table 3

. T angerine growers and acres as percentages of non

- Valencia (“other orange”)

growers and acres, by State , 2007

State Percentage of T angerine G rowe r s Percentage of T angerine A cres

Florida 18.3% 5.5%7

State Percentage of T angerine G rowe r s Percentage of T angerine A cres

California 17.4% 13.6%

Hawaii 73.7% 46.8%

Texas 15.4% 2.8%

Arizona 30.5% 31.7%

Louisiana 31.0% 5.6%

Alabama 0.0% 0.0%

United States 20.5 % 8.6%

Sourc e: USDA NASS

, 2007 Census of Agriculture.

Table 4 summarizes 2007 Census of Agriculture data for “other orange ” growers

by ac reage. According to the data, 1 6 percent of growers had less than 1 acre of “other

orange” varieties , and the vast ma jority o f growers, 93 percent, had less than 10 0 acres of

“other orange” varieties.

Table 4. Size distribution of non

- Valencia (“other orange ”) operations, by number of farms

and acreage

, 2007

Acres Number

of farms Percentage

share Cumulative

percent age Acres Percentage

share Cumulative

percentage

0.1 to 0.9 acres 1,540 16% 16% 463 0% 0%

1.0 to 4.9 acres 2,378 25% 41% 5,575 1% 1%

5.0 to 14.9 acres 2,391 25% 65% 20,056 5% 6%

15.0 to 24.9 acres 987 10% 76% 18,618 4% 10%

25.0 to 49.9 acres 1, 038 11% 86% 36,111 8% 19%

50.0 to 99.9 acres 620 6% 93% 42,829 10% 29%

100.0 to 249.9 acres 422 4% 97% 63,930 15% 43%

250.0 to 499.9 acres 153 2% 99% 50,699 12% 55%

500.0 to 749.9 acres 50 1% 99% 29,718 7% 62%

750.0 to 999.9 acres 26 0% 99% 22,400 5% 67%

1,000.0 to 1,499.9

acres 23 0% 100% 27,322 6% 74%

1,500.0 acres or more 31 0% 100% 113,847 26% 100%

United States 9,659 100% 431,568 100%

Source: USDA NASS

, 2007 Census of Agriculture , Table 35

, Specified fruits and nuts by acres

.8 Tables 5 and 6 summarize data on certain categories of tangerine growers

enumerated in the 2007 Census of Agriculture

. These categories are small family farms,

limited resource farms

, and farms having operators who belong to socially disadvantaged

groups. 7 A tangerin e grower may qualify as a small family farm (or as a limited resource

farm) and also be counted among those for which one or more of the operators belong to

a socially disadvantaged group.

Table 5 shows that a mong the 1,976 farms that grew tangerines

, 1,41 5 ( over 70

percent) were limited resource or small family farms. It is notable that t he combined

number of retirement farms (399 farms) and residential/lifestyle farms (527 farms)

accounted for almost half o f all tangerine farms

.

Table 5

. Number and per centage of limited resource and small family tangerine farms, 2007

Limited

resource

farms Retirement

farms Residential/

lifestyle

farms Farming

occupation/

lower sales Farming

occupation/

higher sales All

small

family

farms Limited

resource

farms plus

sm all family

farms All tangerine

Farms

US 192 399 527 221 76 1,223 1,415 1,976

Percentage

in total

tangerine

growers 10% 20% 27% 11% 4% 62% 72% 100%

Source: USDA NASS, 2007 Census of Agriculture

.

7 USDA ERS. Structure and Finances of U.S. Family Farms: Family Farm Report, 2007 edition , EIB

- 24.

Any farm where the operator and persons related to the operator own a majority of the b usiness is

considered a family farm. Small family farms have annual gross sales of less than $250,000. This category

of farms is further divided into retirement farms (operators reporting they are retired), residential/ lifestyle

farms (operators reporti ng a major occupation other than farming), and farming

- occupation farms

(operators reporting farming as their major occupation). Farming

- occupation farms are further classified as

low

- sales small family farms (gross sales less than $100,000) and high

- sale s small family farms (gross

sales between $100,000 and $249,999).

Limited resource farms have (a) direct or indirect gross farm sales of not more than $100,000 and (b) a total

household income at or below the national poverty level for a family of four, o r less than 50 percent of

county median household income. By definition, limited resource farms qualify as small family farms, but

they are identified as a separate category in the 2007 Census of Agriculture and a re excluded from the

enumeration of small family farms.

Socially disadvantaged operators are members of groups that historically have been subjected to bias and

prejudice. The categories are women; persons of Spanish, Hispanic, or Latino origin; American Indian or

Alaska Native; Asian; Black or African American; and Native Hawaiian or other Pacific Islander

. These

farm operators, themselves, may not have experienced bias or prejudice, but identify with one or more of

these gender, ethnic, and racial groups.9 Table 6 shows the number and percentage of tangerine farm s having operators

belonging to socially disadvantaged groups . There were 321 tangerine farms (16 percent)

for which the principal operator was a woman . In terms of ethnicity, 178 tangerine farms

(9 percent) were operated by Hispanics and 185 tangerine f arms (9 percent) were

operated by Asians. One percent of tangerine farms were operated by African

American s

.

Tab le 6. Number and percentage of tangerine farms with operators belonging to socially

disadvantaged group , 2007

Farms where

the principal

oper ator is

female Farms where

an operator

is of

Spanish,

Hispanic, or

Latino origin Farms where

an operator

reports race

as American

Indian or

Alaska

Native Farms where

an operator

reports race

as Asian Farms where

an operator

reports race

as Black or

African

American Farms where

an operator

reports race

as Native

Hawaiian or

Other Pacific

Islander All

T angerine

Farms

Number of

farms 321 178 59 185 19 58 1,976

Percentage

in total

tangerine

farms 16% 9% 3% 9% 1% 3% 100%

Source: USDA NASS, 2007 Census of Agr iculture

.

Although most tangerine operations are small family farms and significant

percentages of tangerine farm operators belong to socially disadvantaged groups,

economic effects of the rule for these farms are not expected to differ from the effects f or

tangerine growers generally. We do not expect the proposed rule to have any appreciable

impact on U.S. tangerine growers regardless of the size of operation or operator

classification

.

In the case of fresh fruit merchant wholesalers (NAICS 424480), establishments

with no more than 100 employees are considered small by the SBA standard. In 2002,

there were 5,376 fresh fruit and vegetable merchant wholesalers in the United States with

a total of 110,578 paid employees, or on average, 21 paid employees per establishment.

It is likely that domestic fruit merchant wholesalers that may be affected by the rule are

predominantly, if not entirely, small entities.

Prior to the administrative suspension in 2002, Korea and Japan were principal

suppliers of Unsh u oranges to the United States

. Quantities of Unshu oranges imported10

from Korea and Japan , 19 95 to 2009 , are shown in t able 7

. Unshu orange imports from

Japan between 1995 and 2009 averaged 206 metric tons per year. 8 Average imports of

Unshu orange s fro m Korea between 1995 and 2002 were 646 metric tons per year, with

significant year

- to

- year fluctuations . T he average for 2001 and 2002 jump ed to 1,611

metric tons. I mport s from Korea became marginal after 2002. Imports of Unshu oranges

from Japan have b een also declining , even in the recent years during which Unshu

oranges fr om Korea have been prohibited.

According to the PRA which was prepared in 2006 to allow the importation of

Unshu orange s from Cheju Island to Alaska , the quantity of Unshu oranges th at would be

imported was estimated to be between 200 and 2,000 metric tons (440,925 and 4,409,245

pounds)

. 9 The actual volumes exported from Korea during 2007

- 2009 were much less

than the original prediction. The historical import data suggest that Korea ’s suppl y of

Unshu oranges to the United States would not be significant under the proposed rule and

would have little effect on U.S. producers of mandarin varieties such as tangerine and

Satsuma

. This expectation is strengthened by the fact that the vari ous mandarin varieties

grown in the United States do not appear to be close substitutes for Unshu oranges

.

Table 7 . Unshu o range e xports to the United States from Korea and

Japan, 1995

- 200 9

Calendar y ear Korea Japan Total

m etric tons

1995 50 231 281

1996 2 14 160 374

1997 1,1 83 143 1326

1998 31 22 4 255

1999 3 77 342 719

2000 24 2 106 348

2001 1,4 61 291 1752

2002 1,6 11

- 1,611

2003

- 275 285

2004

- 27 2 282

2005

- 256 265

8 This average does not include 2002, since it is likely that Japan would have exported Unshu oranges to

the United States in that year had the United States not required fumigation for all of Japan.

9 USDA APHIS PPQ CHPST, “A Qualitative Pest Risk Analysis for the Importation of Fresh Unsh u

Orange Fruit ( Citrus reticulate Blanco var. unshu Swingle) from the Republic of Korea,” May 25, 2006, pg

33.11

Calendar y ear Korea Japan Total

2006

- 156 165

2007 10 218 228

2008 39 109 148

2009 10 103 113

Sou rce: Global Trade Atlas; HTS 080520

, Mandarins (including tangerines and S atsumas);

clementines

, wilkings and similar citrus hybrids

. Note 1: The export data reported by Korea and Japan differ from the import data compiled by the U.S.

Department of Commerce.

N ote 2 : Prior to 2002, Unshu oranges imported from Japan did not require fumigation. Imports were

allowed from certain areas in Japan , but not from Kyushu. In 2002, the United States allowed

importation of Unshu oranges also from Kyushu, but required fumi gation of all imports from Japan.

That year, Japan did not export Unshu oranges to the United States

. In 2003, the U.S

. regulations were

amended to only require fumigation of Unshu oranges imported from Kyushu.

U.S. tangerine production, imports, export s and domest ic consumption are shown

in t able 8

. Except 1995/1996, t he United States was a net importer of mandarins

(including Satsumas and tangerines). I mports were below 20 percent of supply in the

1990’s (table 9 )

. During the past ten years , except for the 2001/2002 season , imports

increased to the range of 20 to 30 percent of supply. Exports have been relatively stable

since 1995/1996

, at around 4 to 8 percent of total utilization.

Between 1995

- 1996 and 2008

- 2009, domestic fresh tangerine productio n

increased by 16 percent, while imports increased more than five

- fold. The level of

supply were relatively stable at around 380,000 tons between 2000/01 and 2007/08, but

showed a sharp increase in 2007/08 to 458,402 tons. The United States has become mo re

dependent on impo rts of mandarin varieties to supplement increased demand. U.S.

grower revenue from fresh tangerine and other mandarin variety production in 2006

- 07

was $141 million. 10

Table 8

. U.S. f

resh t angerine a supply and utilization

, 1995/96 t hrough 2008/09 ( excludes

processed fruit )

Supply Utilization

Season b U.S. Domestic

Production Imports Total Export U.S. Domestic

Consumption

metric tons (‘000)

1995/ 19 96 293 20 312 22 290

1996/97 299 35 335 23 312

10 USDA NASS , “Citrus fruits final estimates 2003

- 2007

– December 2008”

. h ttp://usda.mannlib.cornell.edu/usda/nass/SB997/sb1009.pdf12 Supply Utilization

Season b U.S. Domestic

Production Imports Total Export U.S. Domestic

Consumption

1997/98 258 39 296 25 271

1998/99 2 49 57 306 14 291

1999/20 00 298 96 395 28 367

2000/ 01 267 100 367 14 352

2001/ 02 297 53 349 15 334

2002/ 03 289 86 376 17 359

2003/ 04 296 92 388 20 368

2004/ 05 258 97 355 20 335

2005/06 282 103 385 21 364

2006/07 245 122 367 16 350

2007/08 361 97 45 8 32 427

2008/09 c 338 129 467 29 438

Source: USDA ERS Briefing Room, Fruit and Tree Nut Yearbook , 2009

.

a Includes all tangerine varieties, such as Fallglo, Sunburst, Honey, cl ementine, mandarin, and S atsuma

. b Season begins in October of first year show n.

c Preliminary

.

Table 9

. U.S. f

resh t angerine a p roducti on and imports as percent of supply

, and export s

and consumption as percent of utilization

, s easons 1995/96 through 2008/09 (excludes

processed fruit )

Season b Production Imports Exports Consumpt ion

1995/ 19 96 94% 6% 7% 93%

1996/97 89% 11% 7% 93%

1997/98 87% 13% 8% 92%

1998/99 81% 19% 5% 95%

1999/2000 76% 24% 7% 93%

2000/01 73% 27% 4% 96%

2001/02 85% 15% 4% 96%

2002/03 77% 23% 5% 95%

2003/04 76% 24% 5% 95%

2004/05 73% 27% 5% 95%

2005/06 73% 27% 5% 95%

2006/07 67% 33% 4% 96%

2007/08 79% 21% 7% 93%

2008/09 c 72% 28% 6% 94%

Source: USDA ERS Briefing Room, Fruit and Tree Nut Yearbook , 2009.

a Includes all tangerine varieties, such as Fallglo, Sunburst, Honey, cl ementine, mandarin, and S at suma

. b Season begins in October of first year shown.

c Preliminary

.

As shown in table 7

, Korea’s Unshu orange export s to the United States peaked in

2002

, with a total volume of 1,611 metric tons . This quantity was 2 percent ( 3 percent )13

of total U.S. tangerine imports in the 2001/02 ( 2002/03 ) season (table 8 )

. Between the

2002/03 and 2008

- 09 season s , U.S. imports of mandarin oranges increased by 42,504

tons, or 49 percent

. However, import s from Korea failed to increase even after the impor t

prohibiti on was lifted in 2007 to allow import s in to Alaska.

Table 10 shows the value of recent U.S. imports of mandarin varieties

. In 2009

,

U.S. imports were valued at $156 million , of which approximately 46 percent was

supplied by Spain ($72 million)

. The sec ond and third largest exporters were Chile ($29

million) and Morocco ($23 million) , with a combined share of 33 percent

. The se three

countries supplied almost 80 percent of U.S. imports of mandarin variet ies in 2009.

Japan

, which supplied the majority of Unshu oranges to the United States, had a share of

only 0.1 percent

.

Table 10

. U.S. import s of mandarin varieties by partner country , 2007

- 2009 (HTS:

080520, M andarins ( including t ang erines and S ats uma s ) ; clementines, w ilkings and

similar citrus h ybrids, fresh/d ried )

Partner Country 2007 2008 2009 2009 %

Share

million dollars

World $ 159.7 $ 157.6 $ 156.1 100.0%

Spain 100.5 87.9 72.4 46.4%

Chile 13.5 17.4 28.9 18.5%

Morocco 14.4 26.1 23.0 14.7%

Peru 11.8 8.6 11.4 7.3%

Australia 8.6 6.3 7.5 4.8%

So uth Africa 6.2 6.0 7.1 4.5%

Mexico 3.0 3.8 2.9 1.9%

Israel 0.3 0.7 1.9 1.2%

Jamaica 0.4 0.2 0.4 0.3%

Dominican Republic 0.0 0.2 0.2 0.1%

Japan 0.3 0.1 0.1 0.1%

China

- - 0.1 0.1%

Italy 0.1 0.3 0.0 0.0%

Switzerland

- - 0.0 0.0%

Source : Global Trade Atlas

.14 Table 11 shows yearly domestic production of Unshu oranges in Korea. Cheju

Island is the primary production area for Unshu oranges and other mandarin varieties

.

Production capacity is con s trained by the limited availability of cultiva ble land on the

island. Harvest time for Korean Unshu oranges is from early September to early

December

, and the period of export s lasts about 40 days

, from November 1 to December

10. Korea’s average production for the last 10 years was 6 3 7,451 metric tons

.

Tabl e 11

. P roduction of U nshu oranges in Korea , 2000

- 2009, metric tons

Year P roduction

m etric tons (‘000)

2000 553

2001 635

2002 776

2003 631

2004 574

2005 638

2006 604

2007 718

2008 561

2009 686

Average 637

Source : National Agricultural Cooperat ive Federation/Jeju Regional HQ/Orange Team

.

Table 12 summarizes Kore a n mandarin variety exports for 2001

- 2009. Russia

and Canada are by far the largest importers. In 2009, Russia imported 1,475 tons (53

percent of Korea’s mandarin variety exports ) and Canada imported 878 tons (30 percent)

.

The U.S. share was less than 0.4 percent in 2009, although it was Korea’s third largest

customer in 2002 and second largest in 2001.

Tab le 12

. Korea’s mandarin variety exports, 2001

- 2009 (HTS: 080520, M andarins (in cluding

t ang erines and S ats uma s ) ; clementines, w ilkings and similar citrus h ybrids, fresh/d ried )

Calendar year 2001 2002 2003 2004 2005 2006 2007 2008 2009

Partner country Metric tons

World 5,038 8,938 8,405 5,722 3,600 2,913 3,399 2,536 2,783

Russia 47 6 1,777 2,342 364 266 1,351 2,584 1,785 1,475

Canada 125 4,811 5,089 4,223 2,493 705 389 465 828

Indonesia 60 49 146 224 70 182 116 13 9615

Calendar year 2001 2002 2003 2004 2005 2006 2007 2008 2009

China 11

- 516 4

- - - - 66

Singapore 111 33 0 111 9 141 67 45 55

Guam 33 46 36 172 83 75 58 62 51

Hong Kong 15 7 11 38 79 54 5 25 44

Mongolia

- - 42

- 9

- - 66 40

Malaysia 94 171

- 147 112 80 43

- 24

Taiwan

- 68 21 17

- 3 20 8 20

United Kingdom

- - - - - - - 3 19

Japan 2,619 358 189 390 326 285 93 13 15

Vietnam 9

- - - 0 18 9

- 13

United States 1,461 1,611

- - - - 10 39 10

Northern Mariana Islands 3 6 4 22 17 11 6 7 9

United Arab Emirates

- - - - - - - 6 8

Thailand

- - - - - - - - 7

Guatemala

- - - - - - - - 3

Kazakhstan

- - - - - - - - 0

Philippines 12

- - - 127

- - - -

Sri Lanka 1

- - - - - - - -

Un identified Country 8

- - - - - - - -

Source : Global Trade Atlas

. Note: Data as reported by the Republic of Korea

.

Table 13 compares Korean production and exports of mandarin varieties . On

average, only 0.7 percent of domestic production was exported. F rom 2005 to 2009, the

export percentages averaged 0.5 percent

.

Table 13

. Korea’s mandarin variety production and exports, 2000

- 2009

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average

Metric tons

Production 552,724 634,892 775,633 631 ,242 573,939 637,696 603,737 718,129 560,616 685,901 637,451

Export s 2,572 5,038 8,938 8,405 5,722 3,600 2,913 3,399 2,536 2,783 4,590

E xport s as a

percentage of

production 0.5% 0.8% 1.2% 1.3% 1.0% 0.6% 0.5% 0.5% 0.5% 0.4% 0.7%

Source s : National Agricul tural Cooperative Federation/Jeju Regional HQ/Orange Team

, Global Trade Atlas

.

Table 14 shows the value, volume a nd unit price of Korea’s exports of mandarin

varieties . The total export values for 2007

- 2009 ranged between $2 million and $3

million, and t he average unit price ranged between $0.78/KG and $1.09/KG during this

period. The value of export s to the United States was merely $ 13,000 in 2009 , and the

unit price was $1.30/KG

.16

Table 14

. V alue, volume and unit price of Korea’s exports of mandarin v arieties , 2007

- 2009

(HTS: 080520, M andarins ( including t ang erines and S ats uma s ) ; clementines, w ilkings and

similar citrus h ybrids, fresh/d ried )

Calendar year 2007 2008 2009

Partner

Country US$

('000) Quantity

(MT) Unit

Price

/KG US$

('00 0) Quantity

(MT) Unit

Price

/KG US$

('000) Quantity

(MT) Unit

Price

/KG % share

in total

quantity

World 2,998 3,399 0.88 1,972 2,536 0.78 3,023 2,783 1.09 100.0%

Russia 1,736 2,584 0.67 1,085 1,785 0.61 1,383 1,475 0.94 53.0%

Canada 624 389 1.61 47 7 465 1.03 964 828 1.16 29.7%

Guam 149 58 2.56 91 62 1.47 117 51 2.31 1.8%

Indonesia 155 116 1.34 17 13 1.29 116 96 1.21 3.5%

Japan 133 93 1.42 98 13 7.65 98 15 6.65 0.5%

Singapore 88 67 1.32 55 45 1.23 77 55 1.39 2.0%

Hong Kong 9 5 1.68 34 25 1.36 53 44 1.19 1.6%

China

- - - - - - 52 66 0.79 2.4%

Mongolia

- - - 36 66 0.54 35 40 0.87 1.4%

Taiwan 23 20 1.11 10 8 1.35 31 20 1.57 0.7%

Malaysia 50 43 1.18

- - - 27 24 1.11 0.9%

Northern

Mariana

Islands 8 6 1.47 9 7 1.32 13 9 1.50 0.3%

United States 13 10 1.31 38 39 0.98 13 10 1.30 0.4%

United

Kingdom - - - 15 3 5.93 12 19 0.65 0.7%

United Arab

Emirates - - - 8 6 1.22 12 8 1.48 0.3%

Thailand

- - - - - - 8 7 1.18 0.3%

Vietnam 11 9 1.30

- - - 8 13 0.63 0.5%

Guatemala

- - - - - - 4 3 1.24 0.1%

Kazakh stan

- - - - - - 0 0 1.00 0.0%

Source : Global Trade Atlas

. Note: Data as reported by the Republic of Korea

.

For comparison, Table 15 shows the value, volume and unit price of U.S. exports

of mandarin varieties

. T otal export values for 2007

- 2009 ranged b etween $2 1 million

and $ 40 million, and the average unit price ranged between $ 1.22 /KG and $1. 34 /KG

during this period. The value of export s to Korea in 2008 and 2009 was $760,000 and

$ 162 ,000 , respectively, with unit price s of $1 .04 /KG and $ 0.98 /KG.17

Tab le 1 5

. V alue, volume and unit price of U.S. exports of mandarin varieties , 2007

- 2009 (HTS:

080520, M andarins ( including t ang erines and S ats uma s ) ; clementines, w ilkings and similar citrus

h ybrids, fresh/d ried )

Calendar year 2007 2008 2009

Partner

c ountry US$

('000) Quantity

(MT) Unit

Price US$

('000) Quantity

(MT) Unit

Price US$

('000) Quantity

(MT) Unit

Price % Share

total

quantity

World 21,032 17,234 1.22 39,381 30,810 1.28 40,214 30,112 1.34 100 %

Canada 16,789 13,870 1.21 24,793 18,850 1.32 27 ,306 18,446 1.48 61.3%

Japan 2,156 1,791 1.20 5,836 4,442 1.31 7,014 6,778 1.03 22.5%

Australia 1,147 682 1.68 3,137 1,996 1.57 2,835 2,027 1.4 6.7%

Netherlands

- - - 2,614 2,726 0.96 1,033 1,128 0.92 3.7%

New Zealand 428 415 1.03 964 785 1.23 668 474 1.41 1.6%

Barbados 203 169 1.21 74 75 0.98 311 258 1.2 0.9%

Korea

- - - 760 732 1.04 162 166 0.98 0.6%

Mexico 43 62 0.70 250 340 0.74 150 193 0.78 0.6%

Russia

- - - 19 13 1.44 144 182 0.8 0.6%

United

Kingdom 45 49 0.91 324 299 1.08 82 79 1.03 0.3%

So urce : Global Trade Atlas

. Note: Data as reported by the United States Department of Commerce

.

If Unshu oranges and U.S.

- grown mandarin varieties were close substitutes, then

U.S. entities could be affected to the extent that Unshu orange imports from Kore a would

displace sales of the U.S.

- grown mandarin varieties. Small entities would be affected,

since they comprise a substantial number of the producers of mandarin varieties.

However, even if all Unshu orange imports from Korea were to directly replace a portion

of U.S.

- grown tangerine c o nsumption , the effect on U.S. producers would be very small

.

Under such a scenario, annual imports of Unshu oranges from Korea of 2,000 metric tons

(the upper limit of the projected range of imports

, which would well su rpass the peak

import volume of 1,611 tons recorded in 2002 ) would displace only 0.6 percent of fresh

tangerines pro duced by U.S. operations in 2008

- 09 . We emphasize that even a small

impact such as this for U.S. producers is highly unlikely.

We expect th at any product displacement that may occur because of the proposed

rule would be borne by other foreign suppliers of Unshu oranges, in particular, Japan’s

exporters. However, we do not expect any significant product displacement as a result of

Korean supp lies. C onsumers may benefit, to the extent that the competition results in

price declines and increased availability of Unshu oranges . We welcome public18

comment that would improve our understanding of possible effects of the proposed rule

for U.S. small entities.

An alternative to this proposed rule would be to continue with the 2002

administrative suspension of the importation of Unshu oranges from Korea into all parts

of the United States except Alaska. Continuing the suspension of Korean Unshu orange

imports into the c ontinental United States is not a satisfactory alternative to the proposed

rule. The proposed rule’s s pecified mitigation measures would ensure a low risk of

introduction of citrus canker and sweet orange scab into the United States. Re sumption

of imports would reestablish import competition with Japanese suppliers, benefiting U.S.

consumers but with little if any expected effect for U.S. producers.

Th e rule would not entail reporting, recordkeeping, or other compliance

requirements beyo nd those set forth in existing regulations, such as in 7 CFR 319.56

- 6,

which requires that all imported fruits or vegetables be subject to inspection at the port of

first arrival. All costs associated with the proposed field pest control program, labeling

,

inspection and certification, and packinghouse procedures, would be incurred by the

owner or the agent of the owner of the fruit prior to importation.

Under these circumstances, the Administrator of the Animal and Plant Health

Inspection Service has dete rmined that this action will not have a significant economic

impact on a substantial number of small entities.