United States 

Department of 

Agriculture

Economic

Research

Service

Economic

Research

Report 115

April 2011

Selected Trade Agreements 

and Implications for 

U.S. Agriculture

John Wainio, Mark Gehlhar, and John Dyck
www.ers.usda.gov

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Recommended citation format for this publication:

Wainio, John, Mark Gehlhar, and John Dyck. Selected Trade Agreements and 

Implications for U.S. Agriculture. ERR-115, U.S. Department of Agriculture, 

Economic Research Service. April 2011. 
United States

Department

of Agriculture

www.ers.usda.gov

A Report from the Economic Research Service

Abstract

Since 2001, the United States has concluded negotiations with 13 countries, resulting 

in 8 trade agreements (TAs). Three additional agreements have been negotiated but not 

yet ratifi ed by Congress, as of March 2011. Other countries have become increasingly 

active in negotiating their own trade pacts. This proliferation of TAs between key U.S. 

trading partners and competitors may have raised concerns among U.S. exporters, whose 

share in established markets could be eroded by such deals. In this study, ERS examines 

how recently concluded TAs between ASEAN (Southeast Asia) countries and China and 

Australia/New Zealand, as well as pending TAs between the United States and Korea, 

Colombia, and Panama, will likely affect U.S. agricultural trade. Model results suggest 

that TAs between ASEAN countries and China and ASEAN countries and Australia/

New Zealand would result in moderate losses to U.S. agricultural exports of about $350 

million to those countries, but losses would be partially offset by gains in other markets. 

U.S. agricultural exports to Korea would expand by an estimated $1.9 billion per year if 

the U.S. TA with Korea were implemented. The U.S.-Colombia TA would result in an 

estimated $370 million in additional U.S. exports per year. U.S. exports would realize 

smaller gains of about $50 million per year under the pact with Panama. Empirical results 

confi rm theoretical fi ndings that trade created under TAs exceeds trade diverted, but that 

results depend on the specifi c circumstances of each agreement.

Keywords: market access, free trade agreements, tariffs, trade agreements, trade 

creation, trade diversion, trade promotion agreements, GTAP model.

Acknowledgments

The authors thank Jason Carver, Dylan Daniels, and Olya Lutchyn of USDA’s Foreign 

Agricultural Service; Carol Goodloe of USDA’s Offi ce of the Chief Economist; Suchada 

Langley, Mary Anne Normile, Daniel Pick, and Sally Thompson of USDA’s Economic 

Research Service (ERS); and four anonymous reviewers for their reviews and valuable 

comments. We also thank John Weber and Cynthia A. Ray of ERS for editorial and 

design services.

John Wainio, jwainio@ers.usda.gov

Mark Gehlhar, mgehlhar@ers.usda.gov

John Dyck, jdyck@ers.usda.gov

Selected Trade Agreements and 

Economic

Research Implications for U.S. Agriculture

Report

Number 115 

April 2011
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Contents

Abbreviations and Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Model, Data, and Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The ASEAN FTAs With China and Australia/New Zealand . . . . . . . . . 7

Potential impact on U.S. agricultural exports . . . . . . . . . . . . . . . . . . . . . 9

Changes in U.S. agricultural exports to the FTA members . . . . . . . . . . 12

Identifying U.S. exports most vulnerable to increased competition . . . 15

The Pending U.S. TAs With Korea, Colombia, and Panama . . . . . . . . 23

The U.S.-Korea Trade Agreement (KORUS) . . . . . . . . . . . . . . . . . . . . . 24

Structure of agricultural trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Agricultural provisions of KORUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Potential impact on U.S. agricultural exports . . . . . . . . . . . . . . . . . . . . 27

The U.S.-Colombia Trade Promotion Agreement (CTPA) . . . . . . . . . . 32

Structure of agricultural trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Agricultural provisions of CTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Potential impact on U.S. agricultural exports . . . . . . . . . . . . . . . . . . . . 35

The U.S.-Panama Trade Promotion Agreement (PTPA) . . . . . . . . . . . 38

Structure of agricultural trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Agricultural provisions of PTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Potential impact on U.S. agricultural exports . . . . . . . . . . . . . . . . . . . . 39

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Appendix 1—Projecting a 2014 Benchmark . . . . . . . . . . . . . . . . . . . . 43

Appendix 2—Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Also see the recently released ERS report Reciprocal Trade Agreements: Impacts 

on Bilateral Trade Expansion and Trade Contraction in the World Agricultural 

Marketplace, by Thomas L. Vollrath and Charles B. Hallahan (www.ers.usda.

gov/publications/err113). This study (ERR-113) uses panel data from all types of 

reciprocal bilateral and regional free trade agreements in operation during 1975-

2005 and a gravity modeling framework to identify the influence of these trade 

agreements on bilateral trade in the agricultural marketplace. Empirical results 

show that these agreements increase agricultural trade between member countries but decrease trade between member and nonmember countries. The study 

presented here (ERR-115) uses a very different analytical framework, the Global 

Trade Analysis Project model, to analyze the impacts of five trade agreements on 

U.S. agricultural exports.
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Abbreviations and Acronyms

AANZFTA ASEAN-Australia and New Zealand Free Trade Agreement

ASEAN Association of Southeast Asian Nations

ATPA Andean Trade Preference Act

BSE bovine spongiform encephalopathy

CBERA Caribbean Basin Economic Recovery Act

CDE constant difference elasticity

CTPA U.S.-Colombia Trade Promotion Agreement

CRS constant returns to scale

EFTA European Free Trade Association

EHP early harvest program

ERS Economic Research Service (USDA)

EU European Union

FTA free trade agreement

GATT General Agreement on Tariffs and Trade

GDP gross domestic product

GSP Generalized System of Preferences

GTAP Global Trade Analysis Project

HS Harmonized System

IDB WTO integrated database

KORUS U.S.-Korea Trade Agreement

MERCOSUR Mercado Común del Sur (Southern Common Market)

MFN most-favored-nation

NAFTA North American Free Trade Agreement

NTM nontariff measure

PTPA U.S.-Panama Trade Promotion Agreement

SPS sanitary and phytosanitary

TA trade agreement

TRQ tariff-rate quota

USDA U.S. Department of Agriculture

USITC U.S. International Trade Commission

USTR U.S. Trade Representative

WTO World Trade Organization
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Summary

What Is the Issue? 

Regional and bilateral free trade agreements (FTAs) have taken on greater 

significance amidst an evolving international trading environment. Member 

countries in FTAs agree to eliminate trade barriers on all or most goods and 

services traded among them. Uncertainties associated with global negotiations under the World Trade Organization (WTO) Doha Development 

Agenda, along with other factors, have contributed to an upsurge in bilateral and regional trade agreements. In this context, major traders have been 

pursuing FTAs; the United States has concluded negotiations with 16 countries since 2001, resulting in 8 trade agreements (TAs) with 13 countries. 

Three additional trade pacts with the Republic of Korea (South Korea, henceforth Korea), Colombia, and Panama have been signed but not yet ratified by 

the U.S. Congress as of March 2011. 

Countries other than the United States are actively negotiating their own 

trade pacts. Trade agreements between key U.S trading partners and/or 

competitors may have raised concerns among U.S. exporters, whose ability 

to maintain share in established markets could be eroded by such agreements, 

particularly in countries where U.S. competitors have gained preferential 

access for their products. Korea, Colombia, and the 10 ASEAN (Association 

of Southeast Asian Nations) countries have been particularly aggressive in 

negotiating TAs. 

In this study, we estimate the possible impacts on U.S. agricultural trade of 

two recently implemented FTAs in which the United States is not a partner: 

the FTAs between the ASEAN countries and China and between the ASEAN 

countries and Australia/New Zealand. We also examine the potential effects 

on U.S. agricultural exporters of pending bilateral TAs between the United 

States and Korea, Colombia, and Panama.

What Did the Study Find?

The effect on U.S. agricultural exports resulting from FTAs that exclude the 

United States depends mainly on the current structure of trade and tariffs in 

the FTA market and the extent to which tariffs or other barriers are decreased 

as a result of the FTA. In markets where tariffs levied on U.S. exports 

will be significantly higher than those levied on FTA members, and where 

U.S. exporters compete directly with FTA members, the FTA can result in 

declining U.S. market share. In some cases, however, these losses can be 

made up by increases in U.S. exports to other markets.

•	Model results suggest that U.S. agricultural exports to the ASEAN region

would be moderately affected by tariff cuts negotiated under the ASEAN 

FTAs with China and with Australia/New Zealand. Demand for U.S. 

exports of bulk commodities, such as wheat, oilseeds, and cotton, would be 

sustained because these commodities already face low tariffs in the region. 

•	Although most-favored-nation applied tariffs for ASEAN countries are low

in general, pockets of high tariffs remain. Eliminating these could divert 

ASEAN country trade with non-FTA members toward the FTA partners. 
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•	Overall, U.S. agricultural exports to the ASEAN region are estimated to

fall about $350 million per year as a result of the FTAs, equal to about 

6 percent of U.S. exports to this region. Much of the decrease would be 

in processed products, reflecting competition the United States faces 

from China, Australia, and New Zealand in the ASEAN market. Some 

U.S. exports may be diverted to other markets, offsetting some of the 

decrease in trade with ASEAN countries. As a result, global U.S. agricultural exports are estimated to decline by only 0.1 percent, or about $173 

million per year.

Pending bilateral TAs between the United States and Korea, Colombia, and 

Panama have potential mutual benefits. 

•	U.S. agriculture will benefit from pending TAs between the United States

and Korea, Colombia, and Panama, largely because U.S. exports to these 

markets currently face significantly higher tariffs than exports from these 

countries face in the U.S. market. 

•	Of the three pending U.S. TAs, the U.S.-Korea Trade Agreement

(KORUS) would offer the largest gains for U.S. agriculture. Total 

U.S. agricultural export gains in the Korean market are estimated at 

over $1.9 billion annually, an increase of about 40 percent. The U.S.-

Colombia Trade Promotion Agreement (CTPA) is estimated to generate 

an increase of 44 percent in U.S. exports, or an additional $370 million 

per year. Though Panama represents a relatively small market, the U.S.-

Panama Trade Promotion Agreement (PTPA) is expected to provide U.S. 

exporters with opportunities for an additional $46 million in annual sales 

of rice, corn, meats, dairy, and processed foods.

•	Each pending U.S. TA partner would have additional access to the U.S.

market for those agricultural commodities that now face U.S. tariff-rate 

quotas. The U.S. sugar sector would face competition from increased 

imports of sugar from Colombia and Panama. Ethnic foods, such as 

biscuits, savory snack foods, ramen noodles, and seaweed products, 

would account for the bulk of the small increase in additional imports 

from Korea as a result of KORUS. Other imports from the three countries 

could be accommodated by the large U.S. market with little effect on 

domestic prices or production. 

How Was the Study Conducted?

The analysis of FTAs in this report uses the most current and comprehensive 

WTO tariff submissions. Applied tariffs were matched to trade flow values 

from official country customs data to provide a preliminary assessment of 

the extent to which the United States would face greater competition from 

competing exporters in selected markets. Measures of tariff protection estimated for both the United States and its trading partners and for the ASEAN 

countries and their new FTA partners were based on the actual negotiated 

reductions in tariffs for each FTA and used to quantify the impacts of each 

free trade agreement. The study employed a well-known global modeling 

framework (Global Trade Analysis Project) to assess the impacts on agricultural trade. 
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Introduction

In March 2001, Robert Zoellick, then U.S. Trade Representative, unveiled 

the Bush administration’s trade strategy of negotiating multilateral, regional, 

and bilateral trade agreements, placing the United States at the heart of a 

network of initiatives to open markets (Blustein, 2009).1 The strategy was 

grounded in two fundamental ideas: (1) trade liberalization is beneficial to 

the U.S. economy, and (2) each venue for trade liberalization offers unique 

opportunities (Burfisher and Zahniser, 2003). The U.S. strategy resulted in 

the initiation of bilateral and regional trade negotiations with over 40 countries, resulting in 8 trade agreements (TAs) with 13 countries.2 Three additional trade agreements with the Republic of Korea (South Korea, henceforth 

Korea), Colombia, and Panama were signed by each country but not yet ratified by the U.S. Congress as of March 2011.3 For many reasons, the World 

Trade Organization (WTO) Doha round of multilateral trade negotiations 

has not yielded timely results. Instead, the uncertainties associated with these 

talks, and other factors, have motivated countries to negotiate their own bilateral and regional pacts. 

The lack of progress by the WTO and the rush to sign free trade agreements 

(FTAs) may actually have become mutually supporting, with one feeding 

off the other. Certainly, FTAs are now the most prominent and rapidly 

expanding feature of the multilateral trading system. The number of FTAs, 

as well as the share of world trade that takes place among FTA partners, has 

steadily increased—from fewer than 25 FTAs in 1990 to 290 in 2010—a 

trend likely to be strengthened by the many FTAs currently under negotiation. In 2009, trade between FTA partners accounted for an estimated 45 

percent of global nonagricultural trade and 54 percent of global agricultural trade. For the United States, these proportions were 33 percent and 41 

percent, respectively, which demonstrates that, despite early U.S. efforts 

to negotiate TAs with trading partners, these agreements still account for a 

smaller portion of U.S. trade than for world trade as a whole.4

The popularity of FTAs is largely tied to their potential for expanding trade 

between members as consumers respond to the availability of lower priced 

imports. At the same time, these agreements are by definition discriminatory, 

which can lead to trade being diverted from nonmembers to members. U.S. 

agricultural exporters’ ability to maintain market share in numerous countries 

that have recently signed FTAs with U.S. competitors is in question. Given 

the significance of overseas markets to U.S. agriculture, coupled with the 

rapid expansion of “third-country” FTAs, it is important that U.S. exporters 

understand how these agreements may affect their ability to compete in the 

future. 

At the center of the debate surrounding third-country FTAs is the potential for trade diversion. Trade diversion refers to the diversion of trade 

from relatively efficient nonmembers to relatively inefficient members. 

In contrast, trade creation is the result of factors such as lower consumer 

prices and greater choices and can involve a shift of production from inefficient domestic providers to more efficient FTA partners. The broad picture 

that emerges in both the theoretical and empirical literature on FTAs is that 

trade creation tends to be the rule, trade diversion the exception (Freund and 

Ornelas, 2010). This may be related to the fact that most countries tend to 

1The term “free trade agreement” 

(FTA) is used generically in this publication to describe nearly all bilateral and 

regional trade agreements, including 

customs unions. The term “trade agreement” (TA) is used when referring to the 

U.S.-Korea Trade Agreement (KORUS). 

The correct term for the U.S.-Colombia 

and U.S.-Panama agreements is “Trade 

Promotion Agreement” (TPA). As with 

KORUS, we sometimes refer to them as 

“TAs.” To our knowledge, there are no 

discernable differences between FTAs, 

TAs, and TPAs. Use of the three terms is 

simply to be consistent with the actual 

name given to an individual agreement.

2These include, by date of entry into 

force, Singapore (2004), Chile (2004), 

Australia (2005), Morocco (2006), El 

Salvador (2006), Honduras (2006), 

Nicaragua (2006), Guatemala (2006), 

Bahrain (2006), Dominican Republic (2007), Costa Rica (2009), Oman 

(2009), and Peru (2009).

3In the case of the U.S.-Korea TA, the 

Korean National Assembly also had not 

yet ratified the agreement as of March 

2011.

4Percentages estimated by authors 

using the United Nations Commodity 

Trade Statistics Database (UN COMTRADE).
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form their first FTAs with “natural trading partners,”—neighboring countries 

or countries in their region—with which they already have an established 

trading relationship.5 Krugman (1991) demonstrated that where FTAs are 

formed by natural partners with low trade costs, the gains from freeing intraregional trade are large and trade creation dominates over trade diversion. 

Trade agreements exhibiting these characteristics include the EU, NAFTA, 

MERCOSUR, ASEAN, and EFTA (see abbreviations and acronyms, p. 

iii). These regional pacts have also been among the most studied FTAs, 

and although the results from these studies are not necessarily applicable to 

all FTAs, the trade creation and trade diversion outcomes from these large 

agreements dominate the results from studies that measure trade effects 

across all FTAs. The salient point is that, while overall trade diversion does 

not appear to be a major concern in the economic literature, in some agreements and sectors it can be significant. 

In recent years, countries that have exhausted regional prospects have begun 

looking further afield for preferential partners. It is entirely plausible that 

these FTAs will result in a higher level of trade diversion. 

In this study, we use a global trade model to estimate the possible effects of 

two recently implemented third-country FTAs on U.S. agricultural trade: 

•	The FTA between ASEAN countries and China

•	The FTA between ASEAN countries and Australia/New Zealand6

The ASEAN countries have been a growing market for U.S. agricultural 

exports; hence, there is strong interest in determining how these two FTAs 

might affect the United States. To shed light on which individual U.S. products might be vulnerable to trade diversion, we also take a more detailed 

look at trade flows and the margins of preference between the United States 

and FTA members, measured as the difference between the tariff that U.S. 

exports will face after the FTAs have been fully implemented and the tariff 

the FTA members receive within the FTAs. 

Despite pressure to protect the interests of U.S. producers of import-sensitive 

commodities (see box, “Key Agricultural Issues in FTAs”), U.S. agricultural 

organizations and food industry associations tend to view FTAs as a way to 

create opportunities to increase agricultural exports by lowering and possibly 

eliminating tariffs. Increasing exports is viewed as vital to improving farm 

income and business profitability. As mentioned, the United States negotiated three TAs that have yet to be implemented as of March 2011. The 

United States and Colombia formally signed the Colombia Trade Promotion 

Agreement (CTPA) on November 22, 2006. A month later, on December 

19, 2006, U.S. and Panamanian negotiators reached agreement on a comprehensive trade agreement, the Panama Trade Promotion Agreement (PTPA). 

The following year, on June 30, 2007, the United States and Korea signed 

the U.S.-Korea TA (commonly referred to as KORUS). Before each of these 

TAs can take effect, Congress must approve the implementing legislation 

submitted by the President. 

5It is for this reason that free trade 

agreements are still commonly referred 

to as regional trade agreements, or 

RTAs. They are also referred to as trade 

promotion agreements (TPAs) and reciprocal trade agreements (also RTAs).

6The 10 members of the Association 

of Southeast Asian Nations (ASEAN) 

are Brunei, Cambodia, Indonesia, 

Laos, Malaysia, Burma (Myanmar), the 

Philippines, Singapore, Thailand, and 

Vietnam.
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The coverage of agriculture in free trade agreements 

(FTAs) often reflects the situation prevailing at the 

multilateral level, with the same products resistant to 

liberalization at the multilateral level also excluded 

from liberalization within FTAs. The coverage of 

nonagricultural products in FTAs, when measured as 

a share of tariff lines, is substantially higher for most 

agreements than coverage of agricultural products, 

confirming that liberalizing agricultural trade is no 

easier for countries at the regional level than it is at 

the multilateral level (WTO, 2009). 

Most countries, including the United States, have some 

agricultural products that benefit from high levels 

of border protection. In many cases, it has proved 

difficult for partner countries to reduce barriers for 

these import-sensitive products within an FTA. Trade 

agreements (TAs) negotiated by the United States have 

generally been comprehensive in scope, sometimes to 

the point of including unfettered market access for 

sensitive agricultural products. The sections dealing 

with the agricultural provisions in pending U.S. TAs 

with Korea, Colombia, and Panama provide details on 

treatment of sensitive products under each agreement. 

As they are included within legally binding 

agreements, FTA tariff commitments not only 

provide for the reduction and elimination of tariffs 

but also provide assurance that these tariffs will not 

be subsequently increased. These FTA bindings are 

particularly valuable in agriculture, where World 

Trade Organization (WTO) bound tariffs can be 

extremely high on some products, even though the 

most-favored-nation (MFN) applied tariffs are much 

lower.1 Because multilateral tariff negotiations are 

done on the basis of a country’s bound, or maximum 

allowable, tariffs, increases in market access as a 

result of negotiated tariff reductions only occur when 

the new bound tariff drops below the applied tariff. In 

the case of tariff cuts negotiated under FTAs, however, 

the first tariff cut is often made off a recent applied 

rate rather than the bound one. As a result, FTAs can 

have very immediate trade impacts. 

In addition to addressing agricultural tariffs, 

countries often seek to address nontariff barriers in 

FTAs, particularly sanitary and phytosanitary (SPS) 

measures applied in the food safety and animal/

plant health areas. Although the United States has 

not normally used TAs as a mechanism to address 

the substance of SPS issues in the past, sanitary 

issues related to U.S. beef exports were particularly 

important in the negotiation of the Korea, Colombia, 

and Panama TAs (Jurenas, 2009). The Colombia 

TA contains an SPS side letter addressing the terms 

of access under which U.S. beef and beef products 

would be allowed to enter Colombia. In the case of 

the Panama TA, both governments have signed an 

agreement detailing how SPS measures and technical 

standards will be applied to bilateral agricultural 

trade. Panama agreed to accept the U.S. meat and 

poultry inspection system “as equivalent to its own” 

and provide access for all U.S. beef and poultry on 

the basis of accepted international standards. In the 

Korea TA, the terms of access for U.S. beef were 

particularly contentious. At the time the negotiations 

were concluded, all differences had not been resolved 

both to increase market access for U.S. beef and to 

address Korea’s human health concerns. Subsequent 

negotiations led to the announcement of a “voluntary 

private sector arrangement” on June 21, 2008, that 

limits sales to U.S. beef only from cattle less than 

30 months old. While both countries are said to view 

this as a transitional step intended to improve Korean 

consumer confidence in U.S. beef, the issue remains 

politically sensitive in both countries. U.S. efforts to 

persuade Korea to accept U.S. beef from cattle of all 

ages remain unresolved as of this report’s release. 

1WTO bound tariffs are ceiling commitments made by 

members to hold duties beneath an agreed level. Once a tariff is 

bound under the WTO, it may not be raised above the bound level 

without compensating the affected parties. In practice, the actual 

tariff a country applies on imports may be at or below the bound 

rate. These are called most-favored-nation (MFN) applied rates. 

Each WTO member must grant this rate to all other WTO members under the GATT’s (General Agreement on Tariffs and Trade) 

MFN rule. MFN treatment is aimed at preventing WTO members 

from discriminating between trading partners. In some cases, 

however, the WTO allows a country to charge some of its trading 

partners a rate below the MFN applied tariff. These rates, called 

preferential tariffs, include the tariffs negotiated under FTAs.

Key Agricultural Issues in FTAs
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Shortly after each TA was negotiated, the U.S. International Trade 

Commission (USITC) published assessments of the likely effect of each 

agreement on the U.S. economy as a whole and on specific industry sectors, 

including agriculture. Since these reports were released, there have been 

significant changes in the global economy and in international relations. 

Colombia, in particular, has been active in negotiating additional FTAs with 

some key U.S. competitors. One of these FTAs—with the four members 

of MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay)—has already 

had visible effects on U.S. agricultural exports and market shares in the 

Colombian market. The U.S. market position in the Colombian market may 

soon be further eroded if the Canada-Colombia FTA and the EU-Colombia 

FTA enter into force and competing exports from these countries receive 

duty-free treatment. Likewise, Korea is negotiating FTAs with the EU, 

MERCOSUR, and Australia. All of these countries are major competitors with the United States in the Korean market. To maintain and improve 

their competitive position relative to that of third countries, U.S. producers 

will also need duty-free access to these markets. We use the GTAP global 

trade model to explore the significance to U.S. agricultural exporters of 

implementing the pending U.S. TAs with Korea and Colombia. Differences 

between ERS GTAP model results and those of the USITC reflect the use of 

different model assumptions and base years. We also analyze U.S-Panama 

trade flows and tariff commitments under the pending U.S. TA with Panama 

to identify agricultural products that may benefit from duty-free treatment 

and report the gains from implementing the TA calculated by the USITC.
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Model, Data, and Assumptions

In this study, we employ a multiregion computable general equilibrium 

model known as GTAP (Global Trade Analysis Project). The primary 

advantage of GTAP is that it incorporates explicit bilateral trade flows, 

which allows for the analysis of free trade agreements (see box, “The GTAP 

Framework”). Each TA, except the U.S.-Panama TA, was analyzed separately to measure the long-term effects of a one-time, full implementation of 

individual agreements. 

The FTA final tariffs and tariff-rate quotas (TRQ) used in the GTAP model 

were obtained from the final texts of each of the FTAs. The applied MFN 

tariffs were obtained from the WTO’s Integrated Database (IDB). The 

margins of preference were calculated as the difference between the applied 

MFN tariffs on U.S. exports and the tariffs to be levied on the exports of 

FTA partners after the FTAs are fully implemented. The U.S. export and 

import data were obtained from USITC’s Dataweb. Trade data for other 

countries were obtained through the Global Trade Information Service’s 

World Trade Atlas database. 

The GTAP simulations were implemented by applying the reductions or 

eliminations of the import tariff rates that were agreed upon in each FTA. A 

few assumptions deserve note. The GTAP database reflects the applied tariff 

rates in 2004, including applied tariffs on trade between ASEAN members. 

It was assumed that ASEAN members would attain duty-free access to 

each other’s markets by 2009, with the exception of trade in rice. To update 

tariffs, it was necessary to eliminate those tariffs on trade between ASEAN 

members prior to extending the FTA with nonmembers of ASEAN. In the 

case of pending TAs, it is uncertain as to when these agreements would be 

implemented. It was assumed that implementation of the agreements would 

begin by 2014. 

FTAs often allow for long implementation periods in the reduction of tariff 

rates, in some cases as long as 20 years. In this study, the transition periods 

are ignored, and the reductions in protection simply assume the full change in 

tariffs after the transition period. While this will yield effects that reflect fully 

implemented tariff cuts, this approach does not provide a time path of the 

effects of these FTAs into the future. Rather, the results were obtained using 

a comparative static framework and are an attempt to simulate trade flows in 

the base period under a new set of tariffs. We know, however, that economic 

growth could arise from trade liberalization over time. The static nature of 

the model we used does not generate results that reflect the dynamic gains 

of trade liberalization. These are effects that could accrue through increased 

savings and investment, increasing returns to scale, or improvements in 

factor productivity through technological spillovers or through freeing up the 

importation of intermediate and capital goods. All of these additional channels of economic growth can magnify the static effects of trade liberalization. 
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The Global Trade Analysis Project (GTAP) framework 

consists of a publically documented model and global 

database (Hertel and Tsigas, 1997; Narayanan and 

Walmsley, 2008). The model links national income 

accounts of all countries through trade and investment 

flows. The framework provides comprehensive 

coverage of production, consumption, and trade of all 

goods and services. Aspects of the model include a 

global banking sector, which intermediates between 

global savings and consumption. Domestic products 

and imports are consumed by firms, governments, and 

households. The model imposes both theoretical and 

basic accounting consistency conditions at the national 

and global level. For example, income by households 

is derived from returns to factors and is used for 

either consumption or savings. In this study, we adopt 

standard assumptions for the model. The model uses 

a constant difference elasticity (CDE) demand system 

for representing private household preferences. The 

model assumes that consumers maximize utility 

subject to a budget constraint and that producers 

maximize profits by combining intermediate inputs 

and primary factors at least possible cost. Within each 

region, firms produce output by employing labor and 

capital and intermediate inputs. Land, however, is 

employed only in agricultural sectors. Constant returns 

to scale (CRS) is assumed for all production sectors. 

Firm output is purchased by consumers, governments, 

other firms, and by other countries as exports. It is 

assumed that capital and labor are fully mobile within 

regions. Product markets are assumed to be perfectly 

competitive, implying zero economic profit for the 

firm. Imports are assumed as imperfect substitutes 

for domestic products and differentiated by origin 

using an Armington-type specification. The standard 

model is used to perform comparative static analysis 

where it is assumed that sufficient time is allowed for 

all markets to adjust to a new equilibrium. Capital 

accumulation is allowed based upon a Baldwin-type 

specification as described by Francois et al. (1996). 

The model is solved as a system of equations using 

the GEMPACK software (Harrison and Pearson, 

1996). The most recent publically available release of 

the GTAP data (Version 7) is benchmarked to the year 

2004. Ideally, the benchmark year should coincide 

with the period in which implementation takes place. 

In this study, the GTAP benchmark year for pending 

free trade agreements (TAs) was updated to 2014 (see 

app. 1). 

As with all models, the GTAP framework has some 

limitations. Being a comparative static model, it 

does not capture many of the dynamic effects from 

increased trade or increased foreign investment. In 

addition, it provides no explicit time dimension for 

estimating when effects from an FTA may arise. The 

impacts reflect what the model’s base year might have 

looked like under a different set of policies. We know, 

however, that the effects of trade liberalization take 

time to unfold. Dynamic models capture these longterm gains of trade liberalization by accounting for 

increased savings and investment and improvements 

in factor productivity from better resource allocation, 

deepening specialization, and technology spillovers. 

All of these additional channels of economic growth 

can magnify the static gains of trade liberalization. 

The model structure also does not allow for potentially 

new trade flows, or extensive margin trade, where 

trade in the base year is zero. Nor does it account 

for nontariff measures (NTMs), such as sanitary and 

phytosanitary measures or technical barriers to trade. 

In some cases, zero trade in the base year is a function 

of NTMs, so cutting tariffs would not necessarily 

result in new trade flows. Some of these FTAs address 

some of these measures through the creation of a 

Standing Committee on Sanitary and Phytosanitary 

Matters in an effort to avoid or resolve trade problems 

generated by these measures. To the extent that an FTA 

results in reducing NTMs through the harmonization 

of technical barriers such as labeling, recognizing 

equivalence in each other’s food safety regimes, or 

mutually agreeing to suspend antidumping laws, these 

reductions would not be captured in our analysis. 

Finally, the model data are historical, which can 

misrepresent current trade patterns. In the analysis of 

the pending U.S. TAs with Korea and Colombia, the 

model values were projected to 2014, when the TAs 

are assumed to have taken effect, based on current 

economic trends as described in appendix 1. 

The GTAP Framework
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The ASEAN FTAs With China and Australia/

New Zealand

The FTAs implemented in recent years between ASEAN and China and 

ASEAN and Australia and New Zealand (henceforth, Oceania) reduce 

trade barriers among major agricultural trading nations that have strong 

agricultural trade ties to the United States. The trade profiles of the three 

entities (ASEAN, China, Oceania) have some overlaps but also strong differences; the three regions specialize in different kinds of agricultural trade. 

Summaries of the entities follow.

•	ASEAN is a net exporting region for agricultural trade, but its agricultural 

imports are large and growing. ASEAN is also a net agricultural exporter 

to the United States, with U.S. imports from ASEAN exceeding exports 

by over $1 billion in each year during 2005-08. ASEAN exports to the 

world (and to the United States) span a wide range of products, including 

rubber, palm and coconut oil, rice, cocoa, pineapples, bananas, coffee, 

cashews, and spices. In most cases, these products do not compete with 

U.S. agricultural products; rice and vegetable oils are the chief exceptions. ASEAN imports wheat, corn, soybeans, soymeal, distillers’ dried 

grains, dairy products, fruits, and processed agricultural products in large 

quantities. 

• China is a net agricultural importing country. In 2009, it had agricultural 

imports of about $45 billion and agricultural exports of about $25 billion. 

Vegetables and fruits (often processed) and other processed food products dominate China’s exports, which are often relatively labor-intensive 

products. Exports to the United States include processed vegetables (such 

as mushrooms, water chestnuts, garlic, and soy products); processed 

fruits (led by tangerines); apple juice; pet food; and sausage casings. U.S. 

exports to China are considerably larger than U.S. imports from China: 

$13 billion versus $3 billion in 2009. At a value of over $9 billion per 

year, U.S. soybean exports dominate agricultural trade between the two 

countries. Cotton, poultry products, and distillers’ dried grains are among 

the other large U.S. exports to China.

•	Australia and New Zealand (Oceania) are large net exporters, together 

exporting $33 billion in agricultural products and importing $9 billion 

in 2009. Australia exports wheat, barley, cotton, and other crops. Both 

countries export large amounts of pasture-based animal products: beef, 

lamb, and mutton; dairy products; and wool. Wine exports are also 

important. U.S. imports from Oceania (beef, lamb, dairy products, and 

wine), at $2.5 billion, are considerably larger than U.S. exports to the 

region ($1.1 billion in 2009), which are led by pork, pet food, and grapes. 

As an agricultural exporter, the United States competes in all three markets 

(ASEAN, China, Oceania). When U.S competitors in these markets receive 

lower tariffs on their exports, U.S. exports will be affected to some extent. 

For example, under an initial agreement between ASEAN and China that was 

signed in 2002 and took effect on January 1, 2004, ASEAN tariffs declined 

on apples from China. U.S. apple exports to ASEAN have since decreased 

whereas China’s apple exports have increased (see box, “The Early Harvest 

Between ASEAN and China”). 
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China and the ASEAN (Association of Southeast 

Nations) countries agreed in Brunei in 2001 to establish 

a free trade area within 10 years. In a subsequent 

meeting in Phnom Penh, Cambodia, in 2002, the 

parties set up an Early Harvest program that would 

eliminate tariffs on goods in the first eight chapters 

of the Harmonized System by 2010 among members 

of the new FTA. These chapters cover live animals, 

meat and edible meat offal, fish, dairy products and 

eggs, other animal products, live plants, vegetables, 

and fruits.

Tariffs on products within these chapters were to be 

reduced or brought to zero for trade between China 

and a wealthier group within ASEAN, comprising 

Singapore, Brunei, Indonesia, Thailand, the 

Philippines, and Malaysia (ASEAN 6). Countries 

could choose to exclude a limited number of specific 

commodities from the Early Harvest and could 

substantially reduce tariffs, rather than completely 

eliminate them. The other ASEAN countries agreed 

to more limited trade liberalization. Most of the tariff 

reductions appear to have been carried out.

U.S. fruit exports may have been seriously affected by 

the tariff reductions granted to China’s fruit exports 

in the Early Harvest. In 1997, U.S. apple exports to 

Southeast Asia peaked at 150,000 tons, just as the 

Asian financial crisis struck. The crisis led to sharp 

devaluations of Southeast Asian currencies that raised 

the prices of imported apples and income losses 

that further discouraged apple buying, triggering a 

dramatic decrease in U.S. apple exports to the region. 

However, when incomes rebounded in the mid-2000s 

and Southeast Asian currencies were stronger, U.S. 

exports failed to increase. Increased apple imports 

by the region were largely captured by exports from 

China (see figure). Tariff reductions granted on imports 

of Chinese apples under the Early Harvest likely 

contributed to the shift to exports from China. Tariffs 

levied on imports of U.S. apples are now higher than 

those on Chinese apples everywhere in the region, 

except in Singapore and Brunei. In the most important 

markets, the difference in tariffs is 5-10 percent. Thai 

imports of apples from China doubled in the first year 

(2003) in which 10-percent tariffs previously facing 

China were removed. Grapes, another leading U.S. 

export to the region, have also lost market share. 

Tariffs on grape imports from the United States are 

as high as 30 percent, while tariffs on imports from 

China are now zero in all the ASEAN countries. 

The Early Harvest Between ASEAN and China

Note: Southeast Asia data are for Indonesia, Malaysia, Philippines, Singapore, and Thailand.

Source: USDA, Economic Research Service using official import data in the Global Trade Atlas. 

Apple imports by Southeast Asia

Metric tons

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Total United States China

1996 97 98 99 2000 01 02 03 04 05 06 07 08 09
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The ASEAN-China free trade area took full effect on January 1, 2010. 

The final agreement removes tariffs on about 90 percent of goods traded 

between China and the six founding members of ASEAN (Brunei, Indonesia, 

Malaysia, the Philippines, Singapore, and Thailand). The agreement with 

China is scheduled to extend to the other four ASEAN nations—Cambodia, 

Laos, Burma (Myanmar), and Vietnam—by 2015 (see app. 2, table 1 for 

information on the agricultural tariff commitments in each agreement). 

Tariffs for products designated as “sensitive” are to be phased out over a 

longer term through 2018, while tariffs on “highly sensitive” products will 

be reduced but not phased out (app. 2, table 2). Under the terms of the FTA, 

highly sensitive products cannot make up more than 40 percent of the sensitive lines or 100 items at the Harmonized System (HS) six-digit level, whichever is lower.7 Vietnam and Cambodia were given special extended tariff 

phase-out provisions for a select group of products. 

Australia and New Zealand began jointly negotiating a free trade agreement 

(AANZFTA) with the ASEAN countries in 2004; the agreement was signed 

in 2009 and entered into force in April 2010. Australia and New Zealand will 

benefit from the eventual elimination of tariffs on 99 percent of their exports 

to the ASEAN countries. Some tariffs were eliminated immediately, with 

the majority of the remaining tariffs reaching zero at various stages between 

2011 and 2020 (app. 2, table 2). A few tariffs will not reach zero until 2025. 

About 5 percent of the ASEAN countries’ tariffs will not be cut to zero. The 

ASEAN countries, on the other hand, will be granted duty-free access in 

Australia and New Zealand for all agricultural goods by 2020. 

ASEAN’s regional free trade agreements are complex: 

•	The FTAs with China and Oceania do not provide uniform treatment

across all ASEAN members. Each ASEAN country has its own schedule 

of reductions on import barriers. 

•	The FTAs also vary widely across the commodity spectrum. Some products, such as rice, receive no bilateral tariff reduction in some or all of 

the national-level schedules of reduction. The “level of ambition” of the 

agreements is not aimed at wholly free bilateral trade in either of these 

agreements.

•	The FTAs are implemented on different schedules for each country,

and the phase-in also differs by commodity within each country. Some 

commodity tariffs go to zero in the first year of implementation, while 

others are reduced to zero only after more than 20 years. Products with 

no close domestic substitute tend to see faster reductions.

•	Some countries retain TRQs even with the new FTA partners. The

concession under the FTA is often to reduce the in-quota tariff over a 

period of time for the new partner.

Potential impact on U.S. agricultural exports

U.S. agricultural exports to the partners in the new ASEAN-related FTAs 

were about $20 billion in 2009 (table 1). Of this amount, almost half were 

soybean exports, of which China alone accounted for $9 billion. Cotton and 

oilseed products represented another 12 percent of the total. Altogether, 

7The Harmonized System is a universal product nomenclature used to 

classify tariffs. Products are categorized 

by chapters, headings, and subheadings. Each subheading is identified by a 

unique six-digit code (the first two digits 

identify the chapter, while the first four 

digits correspond to the heading).
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oilseeds and oilseed products and cotton constituted over 60 percent of total 

U.S. agricultural exports to the three regions. Import barriers to oilseeds and 

cotton are low worldwide because these commodities are used as inputs by 

industries that governments are trying to promote (i.e., meat and textiles). 

ASEAN, China, and Oceania are no exception; tariffs on oilseeds, oilseed 

products, and cotton are generally low, and often zero. Hence, much of 

U.S. agricultural trade going across the Pacific faced low tariffs before the 

ASEAN FTAs were implemented and, thus, would not be significantly 

affected by the agreements. Furthermore, U.S. exports of some major 

commodities, such as soybeans and distillers’ dried grains, would face little 

competition with exports from China (the world’s largest importer), ASEAN 

(major importers), or Oceania (net importers). 

This analysis focuses on Indonesia, Thailand, the Philippines, Malaysia, 

and Vietnam. The rest of ASEAN’s members are excluded from much of 

the analysis because of their small size or lack of data. Singapore has free 

trade for virtually all its imports. Brunei has a small economy and very small 

agricultural trade. Multilateral trade data are difficult to obtain for Burma, 

Cambodia, and Laos. 

As shown in figure 1, the amount of trade that might be vulnerable to heightened competition as a result of these FTAs would appear to be substantially 

less than the total. The bar on the bottom of each figure displays the 5-year 

average value of agricultural goods imported from the United States between 

2005 and 2009.8 The bar above it displays the portion of imports from the 

United States that competed with exports from at least one of the FTA partners in at least 1 of the 5 years.9 In the case of the four ASEAN countries 

depicted, this is the portion of U.S. trade that competed directly with trade 

from China and Oceania; in the case of China, Australia, and New Zealand, 

8Unless otherwise indicated, we 

use the WTO definition of agriculture, 

which includes goods found in HS 

chapters 01 to 24, (minus chapter 03 and 

certain fisheries products) and parts of 

chapters 29, 33, 35, 38, 40, 41, 50, 51, 

52, 53 (all nonfood products of agricultural origin).

9The amounts in these figures are 

based on the import figures reported by 

each country, which may differ from 

the amounts the United States reports as 

exports to these countries.

Table 1

U.S. agricultural exports to ASEAN FTA partners, 2009

ASEAN China

AustraliaNew Zealand Total

$ millions

Wheat 693 87 0 779

Rice 11 1 38 49

Other grains 42 48 0 90

Oilseeds 1,134 9,214 32 10,380

Cotton 619 862 1 1,481

Fruits and vegetables 387 178 211 777

Oilseed products 824 92 97 1,013

Poultry, pork, and offal 238 446 124 808

Beef and offal 201 1 3 205

Dairy products 291 137 27 455

Processed foods 633 267 260 1,160

Other agriculture 1,137 1,779 279 3,196

Total agriculture 6,209 13,112 1,073 20,394

ASEAN = Association of Southeast Asian Nations. FTA = free trade agreement.

Source: USDA, Economic Research Service using USDA’s Foreign Agricultural Trade of 

the United States database.
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Source: USDA, Economic Research Service using trade data in the Global Trade Atlas and tariff data in ERS databases.

Figure 1

U.S. agricultural exports by size of tariff faced, 2005-09 average

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 500 1,000 1,500 2,000

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 200 400 600

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 200 400 600 800 1,000

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 500 1,000 1,500

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 5,000 10,000 15,000

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 200 400 600 800 1,000

Total U.S. exports

Competing exports

Duty free

Duty <=5%

Duty >5%

0 50 100 150 200 250

Malaysia 

Million dollars Million dollars

Philippines Thailand

China Australia

Million dollars Million dollars

New Zealand 

Million dollars Million dollars

Indonesia

Million dollars

{ {

{ {

{ {

{
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it represents the portion of U.S. trade that competed with ASEAN exports 

to these countries. The top three bars in the figures apportion the competing 

exports by the amount that faced zero tariffs, tariffs of 5 percent or less, and 

tariffs greater than 5 percent. We used 2006 MFN applied rates for each 

country except Australia as a proxy for tariffs faced by the United States 

during the entire period. For Australia, we used the tariffs faced by the 

United States under the U.S.-Australia FTA.

In the case of the four ASEAN countries, almost all U.S. trade faced some 

competition from at least one of the countries’ new FTA partners (China, 

Australia, or New Zealand). In the case of Indonesia and Malaysia, however, 

a large portion of this trade was imported at MFN applied rates that were set 

at zero. An estimated 77 percent of Indonesia’s agricultural imports from the 

United States and 69 percent of Malaysia’s imports from the United States 

entered duty free. In the case of Thailand, 37 percent of U.S. exports entered 

duty free; in the Philippines, all U.S. imports were assessed a duty. 

The annual average level of dutiable U.S. exports to these countries was 

$350 million in Indonesia, $175 million in Malaysia, $845 million in the 

Philippines, and $620 million in Thailand. Focusing only on the portion of 

U.S. exports subject to duty, we observe that most U.S. exports to Indonesia 

entered at rates under 5 percent—only 3 percent of dutiable exports from the 

United States to Indonesia were assessed a tariff of over 5 percent. Although 

all U.S. agricultural exports to the Philippines were dutiable, only 16 percent 

were levied a duty above 5 percent. In Malaysia and Thailand, by contrast, 

the shares were 79 and 61 percent, respectively. 

In the case of China, only about a third of U.S. exports faced competition from ASEAN countries, compared with 81 percent in Australia and 

72 percent in New Zealand.10 The majority of U.S. exports to China that 

competed with exports of ASEAN countries faced tariffs in excess of 5 

percent, while U.S. exports to Australia enter duty free under the U.S.-

Australia FTA. About 88 percent of the $85 million of dutiable U.S. exports 

to New Zealand that competed with ASEAN country exports faced tariffs 

above 5 percent. 

Across the seven countries represented in figure 1, U.S. exports averaged $15 

billion per year during 2005-09. Of this amount, $7 billion did not compete 

with exports from the new FTA partners and another $2.66 billion entered 

duty free, leaving just over $5 billion of dutiable competing exports. 

Changes in U.S. agricultural exports to the 

FTA members

With 2009 trade values as a benchmark, GTAP model results suggest that 

overall U.S. agricultural exports to the ASEAN region would be mildly 

affected from implementing these tariff cuts, falling by about 6 percent in 

total, or just under $350 million per year (table 2). However, effects would 

vary significantly across ASEAN countries and commodities (table 3). 

These differences largely reflect the level of direct competition the United 

States would face from China, Australia, and New Zealand as a result of 

the improved market access for these countries in the ASEAN region. The 

breakout for the large ASEAN countries indicates that Thailand would 

10Soybeans accounted for the majority of U.S. agricultural exports to China 

during this period (an average of over 

$5.5 billion per year). There was one 

competing ASEAN country, Burma; 

because its soybean exports to China 

totaled $9,200 in just one year, this trade 

was not counted as being competitive.
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account for over 40 percent of the U.S. export loss. Thai tariffs tend to be 

the highest among ASEAN’s large countries. Indonesia, with generally low 

tariffs, would see a much smaller per year drop ($21 million) in U.S. exports.

As a result of tariff cuts, total agricultural exports to ASEAN by Australia 

and New Zealand would increase by about 27 percent, or nearly $1.2 billion 

per year. However, their agricultural exports to the rest of the world would 

fall about 1.6 percent, or $490 billion per year. As products from Australia 

and New Zealand rise in price, they become less competitive in the rest of the 

world. Overall agricultural exports from Australia and New Zealand to the 

world would increase by just 2 percent. U.S. agricultural exports to Oceania 

would be virtually unchanged, but U.S. agricultural imports from the region 

would fall by about $50 million per year, mainly due to diversion of beef and 

dairy products to ASEAN markets.

Table 2

Impact on total U.S. agricultural exports from ASEAN FTAs with China, 

Australia, and New Zealand1

ASEAN China Rest of world Total

Percent change

Wheat -5.9 1.9 0.2 -0.6

Oilseeds -1.0 0.5 0.2 0.3

Cotton -0.4 2.3 -0.5 0.2

Fruits and vegetables -17.4 -13.8 0.1 -0.6

Oilseed products 1.2 -1.5 0.6 0.6

Poultry, pork, and offal -22.1 -0.0 0.3 -0.4

Beef and offal -13.9 1.2 0.4 0.3

Dairy -16.9 2.1 0.5 -1.9

Processed foods -11.8 -2.6 0.1 -0.6

Other agriculture -4.5 0.3 0.1 0.0

Total agriculture -6.2 0.5 0.2 -0.1

ASEAN China Rest of world Total

$ millions 

Wheat -39.8 1.6 7.5 -30.7

Oilseeds -10.8 47.5 15.5 52.2

Cotton -2.8 18.8 -9.3 6.8

Fruits and vegetables -51.7 -29.9 12.1 -69.5

Oilseed products 9.5 -1.7 32.8 40.6

Poultry, pork, and offal -54.8 -0.3 20.1 -35.0

Beef and offal -6.3 0.4 15.9 10.0

Dairy -43.2 2.5 6.6 -34.1

Processed foods -123.6 -26.1 26.7 -123.0

Other agriculture -24.2 3.6 30.4 9.8

Total agriculture -347.7 16.5 158.2 -173.0

ASEAN = Association of Southeast Asian Nations. FTA = free trade agreement.

1Model base year is 2004; dollar amounts are from applying model’s percent change to 2009 

trade.

Source: USDA, Economic Research Service results of Global Trade Analysis Project modeling 

exercise for this study.
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U.S. agricultural exports to China are expected to increase marginally, 

by $16.5 million per year. New tariff preferences for ASEAN are likely 

to reduce U.S. competitiveness and trade in fruits and vegetables and in 

processed foods. However, China’s demand for oilseeds and cotton is 

expected to increase because of growth in its livestock and textile sectors as a 

result of the ASEAN FTA, raising demand for more imported inputs. 

Under this scenario, U.S. exports to the rest of the world would likely 

increase; as trade intensifies among the three FTA regions, existing exports 

to nonparticipating parts of the world by these countries would be in shorter 

supply and more expensive. U.S. agriculture would gain, marginally, in other 

markets. With a gain of over $150 million in new trade to balance against the 

loss in trade to ASEAN, U.S. agricultural exports to the world would drop 

approximately $173 million after implementation of the FTAs.

Table 3

Projected impact on U.S. exports to selected ASEAN countries from FTAs with China, Australia, 

and New Zealand

Indonesia Malaysia Philippines Thailand Vietnam ASEAN

Percent change

Wheat -7.9 3.2 -6.4 -4.3 -17.7 -5.9

Oilseeds 0.7 -1.0 -4.7 -2.2 -12.3 -1.0

Cotton 1.6 1.1 4.3 -8.6 3.8 -0.4

Fruits and vegetables -4.9 -3.2 -24.0 -32.8 -35.2 -17.4

Oilseed products 1.8 1.4 0.3 -0.6 3.3 1.2

Poultry, pork, and offal 0.5 -0.1 -36.8 -33.9 -17.7 -22.1

Beef and offal -13.9 1.2 -6.9 -91.4 -52.2 -13.9

Dairy -10.3 -0.1 -12.0 -23.7 -41.4 -16.9

Processed foods -2.5 -4.1 -3.5 -35.6 -14.8 -11.8

Other agriculture -1.1 -8.9 0.5 -7.7 -5.8 -4.5

Total agriculture -1.2 -2.3 -7.0 -13.9 -9.6 -6.2

Indonesia Malaysia Philippines Thailand Vietnam ASEAN

$ millions

Wheat -12.0 1.2 -20.5 -6.6 -1.9 -39.8

Oilseeds 4.1 -1.6 -1.2 -4.6 -7.5 -10.8

Cotton 3.7 0.4 0.8 -14.3 6.6 -2.8

Fruits and vegetables -3.8 -2.2 -11.5 -15.4 -18.8 -51.7

Oilseed products 3.2 1.1 1.1 -0.4 4.6 9.5

Poultry, pork, and offal 0.3 -0.0 -39.3 -1.4 -14.4 -54.8

Beef and offal -0.8 0.0 -2.3 -0.5 -2.7 -6.3

Dairy -6.8 -0.1 -9.3 -5.6 -21.4 -43.2

Processed foods -7.2 -8.3 -8.0 -87.6 -12.5 -123.6

Other agriculture -1.3 -6.2 0.5 -9.9 -7.4 -24.2

Total agriculture -20.6 -15.7 -89.6 -146.3 -75.5 -347.7

ASEAN = Association of Southeast Asian Nations. FTA = free trade agreement. 

1Model base year is 2004; dollar amounts are from applying model’s percent change to 2009 trade.

Source: USDA, Economic Research Service results of Global Trade Analysis Project modeling exercise for this study.
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Identifying U.S. exports most vulnerable to increased 

competition

This section takes a more disaggregated look at those U.S. products most 

vulnerable to increased competition in China, Australia, New Zealand, 

and ASEAN. We concentrate only on those U.S. products in each country 

that competed with products from at least one country that was a new FTA 

partner and that were charged a duty (the trade represented in the top two 

bars in figure 1). To simplify the analysis, we focus only on tariff lines where 

U.S. exports during the 2005-09 period averaged over $20,000 per year, and 

where exports of FTA competitors were somewhat significant—defined as 

accounting for more than a 5-percent total market share during our study 

period. For example, if the combined exports from China, Australia, and 

New Zealand accounted for less than 5 percent of total imports in an ASEAN 

country, that tariff line was not included in our analysis. Finally, tariff lines 

where the margin of preference, measured as the difference between the tariff 

that U.S. exports face and the tariff the FTA partners’ exports will face after 

the FTAs have been fully implemented, is below 3 percent were also not 

considered to be vulnerable. 

Tables 4 and 5 display the trade amounts from the tariff lines that we believe 

would be the most vulnerable to increased competition as a result of the 

ASEAN-China and ASEAN-Oceania FTAs. The trade under these tariff lines 

was aggregated across commodity groupings (the number of tariff lines in 

each grouping is provided) for ease in analysis. The last three columns in the 

tables show the simple average margins of preference over these tariff lines 

as well as the minimum and maximum margin of preference within each 

commodity aggregate. Only the top 20 commodity groupings are provided 

in these tables, except in the case of New Zealand, where the identified tariff 

lines were contained within only 16 commodity groupings. In the six other 

countries found in tables 4 and 5, the top 20 commodity groupings accounted 

for at least 90 percent of all U.S. exports identified as most vulnerable.

The first result that stands out is the importance of products in the category 

labeled “food preparations: composite mixtures.” In all seven countries, 

this category is either first or second in terms of value of U.S. exports. This 

is a diverse grouping containing a number of tariff lines, but the bulk of 

U.S. exports are of products in the HS6 category 210690—food preparations not elsewhere specified or included.11 The second notable result is the 

overall importance of processed products within these tables. In addition to 

food preparations, several other processed items account for large amounts 

of trade, including starches, miscellaneous agricultural products, bakery 

foods, and crude vegetable material. With certain exceptions (wheat to the 

Philippines, tobacco to Malaysia and China, corn to China, and cotton to 

China), few bulk commodities are found in these tables. High-value products 

such as fresh apples, grapes, certain dairy products, frozen potatoes, fats and 

oils, cocoa products, and prepared nuts and fruits are also important.

11The category includes products such 

as beverage bases; some snack foods; 

some fruit juice preparations; coffee whiteners; herbal tea mixes; some 

gelatin preparations; and many other 

processed foods, beverages, and food 

ingredients.
16

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Table 4

Average margins of preference for Australia, New Zealand, and China in ASEAN countries - selected U.S. 

average exports, 2005-09—continued

Margin of 

preference - ANZ 

Margin of 

preference - China

Product

United 

States Australia

New 

Zealand China ASEAN

Rest of 

world Total

No. of 

tariff 

lines

AverageMinimumMaximumAverageMinimumMaximum

Indonesia --------------- $ thousands ---------------

Dairy: milk & cream, 

pwdr & cndnsd 83,721 81,217 128,010 79 91,268 74,900 459,195 7 5.7 5.0 10.0 5.7 5.0 10.0

Food prep: 

composite mixtures 36,983 8,797 15,689 12,347 41,255 82,646 197,716 11 5.2 5.0 7.5 5.2 5.0 7.5

Fruit (frsh): apples 23,946 1,226 2,145 71,405 563 2,340 101,625 1 5.0 5.0 5.0 5.0 5.0 5.0

Fruit (frsh): grapes 20,309 11,579 12 6,115 462 9,276 47,753 1 5.0 5.0 5.0 5.0 5.0 5.0

Dairy: other milk 

products 11,389 15,230 14,856 17 181 54,998 96,670 6 5.8 5.0 10.0 5.8 5.0 10.0

Starches 

(nonedible nes) 10,472 2,712 779 9,092 31,990 25,354 80,399 6 5.0 5.0 5.0 5.0 5.0 5.0

Dairy: cheese 6,373 14,425 12,122 18 1,468 2,317 36,723 5 5.0 5.0 5.0 5.0 5.0 5.0

Sweeteners: lactose 

& lactose syrup 5,447 451 2,561 103 84 6,425 15,071 4 5.0 5.0 5.0 5.0 5.0 5.0

Ag products: misc 4,740 3,165 56 4,641 7,210 21,009 40,820 6 5.8 5.0 10.0 5.8 5.0 10.0

Veg (prep): potatoes 4,502 235 513 489 1,045 2,548 9,332 3 5.0 5.0 5.0 5.0 5.0 5.0

Crude vegetable 

material 4,220 8 5,380 1,045 15,065 25,718 10 4.5 0.0 5.0 4.5 5.0 5.0

Veg (frzn): potatoes 3,969 167 898 136 463 4,781 10,414 1 5.0 5.0 5.0 5.0 5.0 5.0

Veg (frzn or prep): 

other 3,925 139 581 238 154 634 5,672 4 5.0 5.0 5.0 5.0 5.0 5.0

Feed: pet food 3,632 1,827 6 23 4,127 773 10,389 3 5.0 5.0 5.0 5.0 5.0 5.0

Meat (frsh or frzn): 

edible offal 3,007 27,801 22,029 134 1,607 54,578 3 5.0 5.0 5.0 5.0 5.0 5.0

Crude animal 

material 2,438 146 298 1,355 282 226 4,746 4 5.4 5.0 6.7 5.4 5.0 6.7

Sweeteners: caramel 

& sugar nes 2,373 7,327 120 2,209 2,529 5,594 20,152 3 5.0 5.0 5.0 5.0 5.0 5.0

Nuts: almonds 2,198 184 5 10 23 2,421 1 5.0 5.0 5.0 5.0 5.0 5.0

Fruit (frsh): oranges 1,574 3,116 6,358 479 5,937 17,464 2 5.0 5.0 5.0 5.0 5.0 5.0

Veg (dried): other 1,535 9 57 2,503 265 371 4,740 2 5.0 5.0 5.0 5.0 5.0 5.0

Top 20 236,751 179,762 200,734 122,514 185,015 316,825 1,241,601 83

Other 18,820 119,740 57,461 144,130 55,437 177,381 572,969 97

Total 255,571 299,501 258,195 266,645 240,452 494,206 1,814,570 180

Top 20 share 93% 60% 78% 46% 77% 64% 68% 46%

Malaysia

Food prep: 

composite mixtures 50,821 5,929 8,934 11,548 7,382 49,051 133,665 8 12.9 5.0 20.0 12.9 5.0 20.0

Tobacco

(unmanufactured) 22,401 191 6,900 20,991 41,091 91,574 2 101.2 98.9 103.4 510.8 499.6 522.1

Cocoa products 6,223 6,350 2,050 3,101 1,959 27,829 47,512 5 15.0 15.0 15.0 15.0 15.0 15.0

Fruit (frsh): apples 4,362 247 1,909 13,402 29 12,231 32,179 1 5.0 5.0 5.0 5.0 5.0 5.0

Food prep: sauces 4,330 1,316 60 3,402 12,384 8,308 29,800 2 12.5 5.0 20.0 12.5 5.0 20.0

Fruit (frsh): grapes 3,920 2,573 9 1,191 25 4,351 12,069 1 5.0 5.0 5.0 5.0 5.0 5.0

Tobacco products 3,043 516 17,914 48,811 37,281 107,565 6 123.3 0.0 643.5 395.3 83.5 707.9

Veg (prep): potatoes 2,202 19 1 477 0 789 3,489 1 8.0 8.0 8.0 8.0 8.0 8.0

continued—
17

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Table 4

Average margins of preference for Australia, New Zealand, and China in ASEAN countries - selected U.S. 

average exports, 2005-09—continued

Margin of 

preference - ANZ 

Margin of 

preference - China

Product

United 

States Australia

New 

Zealand China ASEAN

Rest of 

world Total

No. of 

tariff 

lines

AverageMinimumMaximumAverageMinimumMaximum

Fruit juice: mixtures 2,180 71 3,653 138 12 1,746 7,801 1 6.0 6.0 6.0 6.0 6.0 6.0

Fruit (dried): raisins 2,144 186 3 150 10 1,884 4,377 1 5.0 5.0 5.0 5.0 5.0 5.0

Beverages: wine 1,967 17,777 678 265 6 12,807 33,500 2 64.6 57.3 71.8 155.0 137.6 172.4

Sweeteners: glucose 

& glucose syrup 1,957 2,059 551 503 5,070 1 15.0 15.0 15.0 15.0 15.0 15.0

Grain prod: bakery 

foods 1,777 686 109 5,039 1,449 8,035 17,095 4 6.0 6.0 6.0 6.0 6.0 6.0

Dairy: cheese 1,763 14,190 12,242 12 1,188 3,438 32,832 3 6.7 5.0 10.0 6.7 5.0 10.0

Starches 

(nonedible nes) 1,232 160 9,405 0 2,113 12,910 3 5.7 5.0 6.0 5.7 5.0 6.0

Nuts: mixed or 

prepared 931 1,415 60 25 2,432 1 5.0 5.0 5.0 5.0 5.0 5.0

Beverages: 

nonalcoholic 858 215 8 384 681 428 2,574 3 20.0 20.0 20.0 20.0 20.0 20.0

Oil: peanut 850 632 53 7,019 6,393 2,902 17,850 2 15.0 15.0 15.0 15.0 15.0 15.0

Food prep: candy 850 401 5 192 7 664 2,120 3 5.0 5.0 5.0 5.0 5.0 5.0

Fruit (frsh): stone 737 8 208 434 1,703 3,090 1 5.0 5.0 5.0 5.0 5.0 5.0

Top 20 114,548 51,468 29,716 84,220 102,372 217,180 599,505 51

Other 4,582 2,961 1,153 50,908 20,587 37,687 117,878 46

Total 119,130 54,429 30,870 135,128 122,960 254,866 717,383 97

Top 20 share 96% 95% 96% 62% 83% 85% 84% 53%

Philippines

Grain: wheat 347,884 22,603 22,844 215 104,995 498,541 4 4.5 3.0 7.0 4.5 3.0 7.0

Food prep: 

composite mixtures 23,340 2,407 4,979 8,292 33,937 29,931 102,885 20 6.7 3.0 15.0 6.7 3.0 15.0

Feed: pet food 12,130 2,927 41 1,661 8,420 10,248 35,428 4 14.0 5.0 35.0 2.5 0.0 5.0

Veg (frzn): potatoes 11,384 92 715 112 64 5,318 17,685 1 10.0 10.0 10.0 10.0 10.0 10.0

Meat (frzn): poultry 7,167 2,050 56 25 132 8,348 17,778 5 9.3 8.0 14.4 2.8 0.0 7.0

Fruit (frsh): grapes 6,334 683 16 104 2 1,093 8,232 1 7.0 7.0 7.0 7.0 7.0 7.0

Cocoa products 5,509 2,549 1,051 1,528 6,208 3,731 20,576 11 6.6 3.0 7.0 6.6 3.0 7.0

Tobacco 

(unmanufactured) 5,049 186 173 21,331 14,083 114,282 155,105 4 7.0 7.0 7.0 7.0 7.0 7.0

Beverages: wine 4,682 2,212 179 43 396 5,493 13,006 6 6.7 5.0 7.0 6.7 5.0 7.0

Veg (prep): 

tomatoes 4,625 7 367 9,303 177 1,774 16,253 2 9.5 9.0 10.0 9.5 9.0 10.0

Sweeteners: glucose 

& glucose syrup 4,197 6 1 9,685 2,312 3,015 19,216 4 3.0 3.0 3.0 3.0 3.0 3.0

Veg (dried): beans, 

peas, & lentils 4,190 506 11 992 2,611 2,988 11,296 6 4.2 3.0 10.0 4.2 3.0 10.0

Starches 

(nonedible nes) 2,952 55 62 1,761 4,578 5,380 14,788 4 3.0 3.0 3.0 3.0 3.0 3.0

Meat (frzn): beef 2,916 11,357 4,222 140 120 113,641 132,396 2 10.0 10.0 10.0 10.0 10.0 10.0

Dairy: other milk 

products 2,470 8,743 23,507 176 2,513 6,607 44,015 4 4.0 3.0 7.0 4.0 3.0 7.0

Grain: corn 2,011 1,540 774 30 3,877 8,233 2 11.2 7.0 15.3 7.8 7.0 8.5

Sweeteners: carmel 

& sugar nes 1,910 127 5,319 1,136 4,825 13,317 4 3.0 3.0 3.0 3.0 3.0 3.0

continued—
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Table 4

Average margins of preference for Australia, New Zealand, and China in ASEAN countries - selected U.S. 

average exports, 2005-09—continued

Margin of 

preference - ANZ 

Margin of 

preference - China

Product

United 

States Australia

New 

Zealand China ASEAN

Rest of 

world Total

No. of 

tariff 

lines

AverageMinimumMaximumAverageMinimumMaximum

Dairy: cheese 1,872 9,697 21,371 7 469 2,964 36,378 5 5.4 3.0 7.0 5.4 3.0 7.0

Crude vegetable 

material 1,782 37 18 3,166 597 6,097 11,696 5 3.8 3.0 7.0 3.8 3.0 7.0

Crude animal 

material 1,619 601 593 1 44 584 3,441 3 3.0 3.0 3.0 3.0 3.0 3.0

Top 20 454,022 68,386 57,364 87,263 78,044 435,190 1,180,268 97

Other 22,319 23,674 22,921 70,505 70,304 80,642 290,364 128

Total 476,341 92,059 80,285 157,768 148,347 515,832 1,470,632 225

Top 20 share 95% 74% 71% 55% 53% 84% 80% 43%

Thailand

Food prep: 

composite mixtures 76,679 11,940 5,617 12,073 60,634 84,641 251,584 18 7.8 5.0 30.0 7.8 5.0 30.0

Feed: pet food 66,502 11,403 46 14,952 10,647 78,582 182,132 8 9.0 9.0 9.0 4.0 4.0 4.0

Skins & hides: 

bovine 54,987 36,403 3,443 127 7,509 56,669 159,139 5 5.0 5.0 5.0 5.0 5.0 5.0

Dairy: other milk 

products 31,988 39,030 75,208 1,575 356 44,708 192,865 5 11.3 5.0 30.0 2.3 0.0 11.5

Fruit (frsh): apples 13,807 10,370 23,542 286 147 35,846 83,997 9 20.3 5.0 30.0 20.3 5.0 30.0

Feed: waste & 

residues nes 11,923 3,271 135 6,869 22,198 4 0.0 0.0 0.0 30.0 30.0 30.0

Fruit (frsh): grapes 11,063 92 4,911 54,340 116 4,958 75,480 1 12.3 12.3 12.3 12.3 12.3 12.3

Veg (frzn): potatoes 10,202 934 14 2,151 13,301 3 6.3 5.0 9.0 6.3 5.0 9.0

Nuts & fruit 

(dried & frsh) nes 10,113 7,456 14,965 121 4,079 36,735 1 30.0 30.0 30.0 30.0 30.0 30.0

Starches 

(nonedible nes) 10,106 59 2,213 525 33 3,197 16,133 1 30.0 30.0 30.0 30.0 30.0 30.0

Crude vegetable 

material 8,304 813 550 7,973 249 15,160 33,048 10 13.8 5.0 27.0 13.8 5.0 27.0

Nuts: almonds 8,206 114 1,022 8,526 6,293 1,597 25,759 8 38.8 30.0 40.0 34.6 23.3 40.0

Live poultry 5,759 321 6 168 0 46 6,300 2 10.1 10.0 10.3 10.1 10.0 10.3

Food prep: 

margarine 4,216 680 1,259 6,742 8,001 18,115 39,014 7 12.1 0.0 30.0 16.3 5.0 30.0

Fruit (prep): stone 2,720 213 0 225 3,158 1 15.0 15.0 15.0 15.0 15.0 15.0

Cocoa products 2,558 867 112 126 5,253 1,468 10,384 3 28.5 25.4 30.0 28.5 25.4 30.0

Tea extracts 2,483 11 5,634 147 16,055 24,331 3 30.0 30.0 30.0 30.0 30.0 30.0

Nuts & fruit 

(prepared) nes 2,480 2,251 632 1,685 3,668 8,300 19,016 4 10.0 10.0 10.0 10.0 10.0 10.0

Fruit juice: 

grapefruit 2,462 1 0 1,446 529 2,107 6,545 3 30.0 30.0 30.0 30.0 30.0 30.0

Food prep: sauces 2,427 399 363 9,153 362 15,075 8 30.0 30.0 30.0 27.5 25.0 30.0

Top 20 338,984 122,423 118,924 144,502 104,213 387,144 1,216,191 104

Other 36,151 49,721 21,051 130,011 143,448 233,341 613,723 165

Total 375,135 172,144 139,976 274,514 247,661 620,486 1,829,914 269

Top 20 share 90% 71% 85% 53% 42% 62% 66% 39%

ASEAN = Association of Southeast Asian Nations. ANZ = Australia/New Zealand. nes = not elsewhere specified.

Source: USDA, Economic Research Service calculations using 2005-09 trade data in the Global Trade Atlas and tariff data in ERS databases.
19

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Table 5

Average margins of preference for ASEAN countries in China, Australia, and New Zealand - selected U.S. 

average exports, 2005-09—continued

Product

United 

States ASEAN

Rest of 

world Total

No. of 

tariff lines

Margin of preference - ASEAN1

Average Minimum Maximum

China ------------ $ thousands ------------

Food prep: composite mixtures 96,808 33,187 251,590 381,585 3 16.7 10.0 20.0

Starches (nonedible nes) 19,882 60,086 40,263 120,230 2 16.0 12.0 20.0

Ag products: misc 16,153 276,749 110,592 403,495 8 14.3 10.0 16.0

Oil: soybean 10,670 1,422 7,746 19,838 1 10.9 10.9 10.9

Crude vegetable material 8,791 16,877 31,840 57,508 9 13.2 6.0 20.0

Cocoa butter and paste 8,350 4,438 13,032 25,820 1 10.0 10.0 10.0

Fats & oils: animal & veg nes 8,071 16,662 32,907 57,640 2 15.0 10.0 20.0

Essential oils 6,249 9,764 21,981 37,993 3 15.0 15.0 15.0

Food prep: sauces 6,164 25,518 29,122 60,804 1 20.0 20.0 20.0

Grain: corn 4,873 8,786 58,853 72,512 1 21.0 21.0 21.0

Grain prod: bakery foods 3,844 7,387 31,412 42,643 4 7.5 0.0 10.0

Fiber: cotton (carded) 3,712 5,157 185 9,053 1 15.0 15.0 15.0

Grain prod: breakfast cereal 3,509 9,519 62,845 75,872 5 19.0 15.0 25.0

Tobacco (unmanufactured) 2,842 3,482 7,229 13,553 2 27.5 25.0 30.0

Food prep: candy 2,801 2,601 5,082 10,484 1 5.0 5.0 5.0

Nuts & fruit (prepared) nes 2,564 7,937 26,747 37,248 3 17.3 10.0 30.0

Veg (prep): other 2,332 1,870 2,162 6,365 2 15.0 15.0 15.0

Fats & oils: vegetable 2,236 17,722 3,768 23,725 2 12.5 10.0 15.0

Crude animal material 2,041 1,372 1,561 4,974 5 21.0 10.0 25.0

Food prep: pasta (stuffed) 1,947 170,192 7,506 179,645 2 22.5 20.0 25.0

Top 20 213,840 680,729 746,421 1,640,989 58

Other 22,152 865,847 312,826 1,200,826 66

Total 235,992 1,546,576 1,059,247 2,841,815 124

Top 20 share 91% 44% 70% 58% 47%

Australia

Food prep: composite mixtures 74,379 42,121 570,999 687,499 2 4.5 4 5

Grain prod: bakery foods 10,662 33,321 147,794 191,777 3 5 5 5

Nuts & fruit (prepared) nes 7,764 7,598 103,864 119,226 2 5 5 5

Fruit juice: mixtures 5,406 5,109 16,650 27,165 4 5 5 5

Beverages: distilled spirits nes 4,982 8,531 16,008 29,521 1 5 5 5

Veg (prep): other 4,412 1,345 18,633 24,390 1 5 5 5

Grain prod: breakfast cereal 1,369 2,053 6,963 10,385 1 5 5 5

Veg (frzn): other 1,213 8,290 34,345 43,847 5 5 5 5

Sweeteners: carmel & sugar 

nes 1,153 4,098 22,318 27,568 2 4.5 4 5

Nuts & fruit (dried & frsh) nes 1,054 1,267 11,631 13,952 1 5 5 5

Food prep: pasta (stuffed) 1,052 3,034 46,913 51,000 1 5 5 5

Oil: cottonseed 1,014 819 4,512 6,345 1 5 5 5

Food prep: margarine 989 1,106 5,501 7,596 2 5 5 5

continued—
20

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Table 5

Average margins of preference for ASEAN countries in China, Australia, and New Zealand - selected U.S. 

average exports, 2005-09—continued

Product

United 

States ASEAN

Rest of 

world Total

No. of 

tariff lines

Margin of preference - ASEAN1

Average Minimum Maximum

Oil: soybean 923 9,749 5,863 16,535 1 5 5 5

Oil: linseed 827 7,280 23,407 31,513 1 5 5 5

Ag products: misc 640 4,314 2,987 7,941 1 5 5 5

Nuts: mixed or prepared 529 22,295 7,388 30,212 2 5 5 5

Food prep: candy 313 23,113 47,349 70,775 1 5 5 5

Veg (dried & frsh): roots & 

tubers 199 8,580 5,326 14,105 1 5 5 5

Food prep: soup 198 240 1,142 1,580 1 5 5 5

Top 20 119,078 194,262 1,099,593 1,412,932 34

Other 570 4,667 9,439 14,676 6

Total 119,648 198,928 1,109,032 1,427,608 40

Top 20 share 99.5% 98% 99% 99% 85%

New Zealand

Food prep: composite mixtures 28,591 12,208 150,405 191,204 3 6.8 6.5 7.0

Feed: pet food 15,073 3,840 25,234 44,147 2 6.8 6.5 7.0

Food prep: sauces 2,711 4,870 30,418 37,999 1 6.5 6.5 6.5

Nuts & fruit (prepared) nes 761 759 6,075 7,594 1 7.0 7.0 7.0

Nuts & fruit (dried & frsh) nes 411 208 1,754 2,373 1 5.0 5.0 5.0

Sweeteners: carmel & sugar 

nes 393 60 394 847 1 5.0 5.0 5.0

Veg (frzn): other 375 145 207 726 1 7.0 7.0 7.0

Beverages: nonalcoholic 260 524 6,223 7,007 2 5.8 5.0 6.5

Cocoa products 190 3,127 13,515 16,832 1 6.5 6.5 6.5

Fats & oils: vegetable 142 4,515 986 5,642 1 5.0 5.0 5.0

Dairy: milk & cream, pwdr & 

cndnsd 85 189 2,822 3,095 1 5.0 5.0 5.0

Cocoa powder 76 220 1,623 1,919 1 6.5 6.5 6.5

Fruit (prep): composite 

mixtures 68 744 5,345 6,157 1 6.5 6.5 6.5

Veg (frzn or prep): other 41 17 116 175 1 6.5 6.5 6.5

Grain prod: flour (wheat) 29 828 4,958 5,815 1 6.0 6.0 6.0

Grain prod: flour (nonwheat) 26 549 587 1,162 1 5 5 5

Total 49,230 32,803 250,662 332,694 20

nes = not elsewhere specified.

1The free trade agreement (FTA) between the United States and Australia brought most bilateral tariffs to zero. Margins of preference for 

Australia are the pre-existing Australian tariffs facing ASEAN (Association of Southeast Asian Nations), which disappear as the FTA with ASEAN 

is implemented.

Source: USDA, Economic Research Service calculations using 2005-09 trade data in the Global Trade Atlas and tariff data in ERS databases.
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U.S. exports of products in the “food preparations: composite mixtures” 

category accounted for a total yearly average of about $190 million to the 

four ASEAN countries (see table 4). The average margins of preference for 

goods in this category range from 5.2 percent in Indonesia to 12.9 percent in 

Malaysia, with the maximum tariffs ranging from 7.5 percent in Indonesia 

to 30 percent in Thailand. The advantage that China, Australia, and New 

Zealand exporters will have over U.S. exporters may be fairly significant for 

some of these exports, so it should be no surprise that in the results of the 

model-based analysis, U.S. trade in processed foods declines by the largest 

amount, totaling $123.6 million per year in the ASEAN region. 

Other important commodities exported to all four countries include fresh 

apples, fresh grapes, and frozen potatoes. U.S. exports of these products 

averaged between $8.6 million per year to Malaysia and $48.2 million to 

Indonesia, totaling over $100 million per year to the four ASEAN countries. 

The average margins of preference for these commodities range from 5 to 6 

percent for most products in Indonesia to 30 percent or higher for some fruits 

and nuts in Thailand (see table 4). Model results show U.S. exports of fruits 

and vegetables to the ASEAN countries decreasing by over $50 million per 

year.

Products in a number of important tariff lines (in terms of export value) 

identified as vulnerable are primarily exported by the United States to only 

one or two countries, including wheat and frozen poultry to the Philippines; 

powdered and condensed milk to Indonesia; pet food, hides and skins, and 

dairy products to Thailand; and unmanufactured tobacco and cocoa products 

to Malaysia. Among these products, model results show that U.S. poultry 

exports to the Philippines are particularly vulnerable, with projected losses of 

almost $40 million per year. U.S. wheat exports to the Philippines averaged 

almost $350 million per year, representing the largest traded item in the list. 

The modeling analysis projected losses of only $20 million in U.S. wheat 

exports to the Philippines, largely because the margin of preference is fairly 

low, averaging 4.5 percent, and the United States is by far the dominant 

supplier. Of the Philippines’ total wheat imports, the United States had an 

average market share of 70 percent versus only 5 percent each for Australia 

and China, and the majority of these exports entered at an MFN applied 

rate of only 3 percent, so the vulnerability of U.S. wheat exports is borderline according to our criteria. U.S. tobacco and tobacco product exports to 

Malaysia appear vulnerable given the rather large margins of preference 

provided by the FTAs. As a large competing exporter in both these markets, 

China could capture market share from the United States. These products 

would be included in the GTAP model category “Other agriculture,” where 

U.S. exports are projected to drop by $6.2 million per year.

At a total value of $235 million per year, the amount of U.S. exports to China 

identified as vulnerable is small relative to total U.S. exports to China (see 

table 5). As stated earlier, the vast majority of U.S. exports to China do not 

compete directly with exports from ASEAN countries; for most U.S. products that faced some competition, the amount exported by ASEAN countries was extremely low. In addition, many tariffs in HS Chapters 1-8 were 

reduced to zero under the Early Harvest Program in 2004. 
22

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As in some of the ASEAN countries, the largest vulnerable category of U.S. 

exports in China was “food preparations: composite mixtures” followed by 

starches (HS Chapter 35), miscellaneous agricultural products (mannitol, 

sorbitol, glycerol, stearic and oleic acid, etc.), and soybean oil. These four 

categories accounted for over 60 percent of all identified vulnerable U.S. 

exports. The average margins of preference for ASEAN exporters tend to 

be higher, averaging between 11 and 17 percent for these four commodity 

groupings, partly because China tends to apply tariffs at or near their bound 

levels. 

In Australia, the category “food preparations: composite mixtures” accounted 

for $74 million per year—over 60 percent of the vulnerable products total—

in U.S. exports. Baked goods (e.g., mixes and dough, bread, pastries) were 

the next highest category. The margins of preference were between 4 and 

5 percent across the board for Australia. As stated earlier, the advantage 

that U.S. exporters already receive over ASEAN exporters under the U.S.-

Australia FTA will disappear as a result of the ASEAN-Australia FTA, as 

will the margins of preference listed in table 5 that favor U.S. exporters. 

Finally, the amount of U.S. exports to New Zealand identified as vulnerable 

is very small, although like the product mix exported to the other countries, it 

tends to consist mainly of processed products.
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The Pending U.S. TAs With Korea, Colombia, 

and Panama

The United States signed successive TAs with Colombia, Panama, and 

Korea between November 2006 and June 2007. Each agreement, however, 

still awaits U.S. congressional approval before it can be implemented. All 

three pending agreements are comprehensive TAs that contain market access 

provisions of interest to U.S. agriculture. In addition to eventually eliminating tariffs and quotas on most agricultural goods, each agreement has 

sought to address other nontariff barriers, particularly SPS measures. 

As with most FTAs, the agricultural negotiations addressed how to protect 

producers of imported sensitive commodities. For most commodities, 

negotiators agreed on long implementation periods, which in some cases 

delayed the initial tariff cut for several years (app. 2, table 3). In the case 

of the KORUS, 21 percent of U.S. agricultural tariff lines are already free 

of duty, compared with only 2 percent for Korea. Of the more than 1,810 

U.S. and 1,550 Korean tariff lines, approximately 58 percent of U.S. tariff 

lines and approximately 38 percent of Korean tariff lines would be free of 

duty or would become so immediately upon entry into force of the TA. One 

hundred percent of U.S. tariff lines and 98 percent of Korean tariff lines 

would have free rates of duty by the end of the implementation period. In the 

case of the CTPA, 68 percent of U.S. agricultural tariff lines and 78 percent 

of Colombian agricultural tariff lines are already free of duty or will become 

so immediately upon implementation of the CTPA. While 21 percent of U.S. 

tariff lines are already free of duty, none of Colombia’s agricultural tariff 

lines are categorized as already free of duty. Because of this tariff asymmetry, the immediate effects of the TA will be a relatively large improvement in U.S. access to the Colombian market. In the case of the PTPA, 89 

percent of U.S. agricultural lines and 68 percent of Panamanian agricultural 

lines are already free of duty or would become so immediately upon implementation of the TA. U.S. tariff commitments would largely make permanent 

the duty-free provisions that Colombia receives under the Andean Trade 

Promotion Act (ATPA) and that Panama receives under the Caribbean Basin 

Economic Recovery Act (CBERA). In the cases of both the CTPA and the 

PTPA, and as opposed to KORUS, the United States excluded 47 tariff lines 

from the agreement. These include over-quota tariffs on items such as sugar 

and sugar-containing products.

In many cases, the agreements include new, country-specific TRQs to allow 

some duty-free treatment during the transition period. In addition, the agreements allow for the imposition of safeguards or temporary higher tariffs 

in the case of import surges. For a few of the most sensitive commodities, 

import TRQs were created that allow for increased market access over time, 

but the tariffs on imports in excess of these quotas would not be cut—protection for these commodities would remain at the MFN level. Finally, in the 

most extreme example, the United States agreed to Korea’s request that rice 

be completely excluded from their TA.
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The U.S.-Korea Trade Agreement (KORUS)

Structure of agricultural trade

Korea, a longstanding major market for U.S. agricultural exports, was the 

fifth largest country market for U.S. agriculture in 2007-09. The United 

States is the largest supplier of Korea’s agricultural imports, with a share 

over 25 percent in recent years. U.S. imports from Korea averaged $290 

million during 2007-09, placing Korea 41st as a supplier of agricultural 

commodities to the United States. Leading U.S. imports from Korea were 

specialty food products, ramen noodles, cigarettes, and fresh pears and 

quinces. The United States runs a positive agricultural trade balance with 

Korea, averaging over $4 billion during 2007-09 (table 6). 

U.S. agricultural exports to Korea can be divided into supplies that are inputs 

for Korean industries and products that compete with the outputs of Korean 

industries for consumer expenditures. Some of the inputs include wheat, 

corn, soybeans, cotton, and hides used in processing.

These input commodities usually are imported with little or no tariff (see 

box, “Korean TRQs”). This is because (1) they do not displace domestic 

Korean production, and (2) the industries that use them need low-cost inputs 

to compete in the Korean and global marketplaces. On the other hand, products that compete with domestic Korean production are often assessed a tariff 

that helps the Korean producer maintain higher prices.12 In the last decade, 

U.S. agricultural exports to Korea have typically been split between the two 

categories, with about half of the exports in 2009 filling the input role and 

paying almost no tariff (fig. 2).

12For example, Korea charges a 50-percent tariff on oranges, a 40-percent 

tariff on beef, and a 25-percent tariff on 

frozen pork.

Table 6

Composition of U.S. agricultural trade with Korea, 2007-09 averages

Product

Main U.S. exports

Product

Main U.S. imports

Value Share of total Value Share of total

$ millions Percent $ millions Percent

Corn 1,369.9 31.4 Food preparations 53.7 18.5

Wheat 375.5 8.6 Pasta products 34.8 12.0

Cattle hides 279.7 6.4 Nonalcoholic beverages 33.2 11.5

Soybeans 207.5 4.8 Tobacco products 29.2 10.1

Pork: fresh, chilled, frozen 204.8 4.7 Fresh pears and quinces 23.0 7.9

Beef: fresh, chilled, frozen 203.5 4.7 Baked products and pastries 21.2 7.3

Food preparations 174.0 4.0 Nuts and fruit, prepared 14.8 5.1

Hay and other forage products 168.9 3.9 Locust beans, seaweeds and 

other algae 9.3 3.2

Cotton 111.1 2.5 Ethyl alcohol 8.6 3.0

Nuts 93.6 2.1 Vegetable saps and extracts 6.0 2.1

Subtotal, top 10 3,188.5 73.0 Subtotal, top 10 233.8 80.7

All other agricultural products 1,179.3 27.0 All other agricultural products 55.9 19.3

Total 4,367.8 100.0 Total 289.6 100.0

Source: USDA, Economic Research Service using U.S. International Trade Commission’s Dataweb. 
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In KORUS, U.S. exporters have little to gain from the elimination of very 

low tariffs on the input commodities. Rather, U.S. interests are more focused 

on commodities that have higher tariffs. These commodities tend to compete 

with commodities produced in Korea. 

Korea currently makes widespread use of tariff-rate quotas (TRQs) 

for agricultural products. TRQs for corn, soybeans, and soymeal are 

of interest to the United States. These TRQs provide protection for 

a certain group of Korean farmers or manufacturers. The TRQs have 

very low within-quota tariff levels and very high over-quota levels 

(see table). For major commodities, even the within-quota tariff levels 

are sometimes waived. For example, the over-quota tariff for corn for 

feeding is 328 percent. The within-quota tariff is 3 percent. However, 

the actual applied tariff is 0. Korean farmers grow limited quantities of 

corn and soybeans. If industries in Korea do not purchase the farmers’ 

output at the high prices necessitated by high costs of production, the 

Korean Government can reduce the TRQ quantities or raise the in-quota 

tariffs. This has not occurred in the past. 

Korea also uses the TRQ method to lower tariffs. For commodities such 

as soymeal for which there is no WTO-committed TRQ, the Korean 

Government has chosen to open new voluntary TRQs that offer a lower 

tariff rate to a limited volume of imports. In the case of soymeal, the 

TRQ quantity far exceeds the maximum import level of the past. Using 

this method, Korea has the option of revising tariffs periodically. For 

instance, a low tariff on a large commodity flow can be reinstituted to 

raise a substantial amount of Government revenue. 

Korean TRQs

Selected Korean tariff rate quotas (TRQ)

OverquotaIn-quota, 

base

In-quota, 

adjusted

TRQ quantity

Base

Voluntary 

2010

Tariff, in percent Metric tons

Corn for feeding 328 3 0 6,102,100 9,000,000

Corn for starch 328 3 1 1,850,000

Soybeans for crushing1 487 3 0 846,365 1,200,000

Soybeans for other uses1 487 5 5 185,787 266,800

Soymeal for feed 1.8 1 unlimited 2,700,000

TRQ = tariff-rate quota.

1The tariff for soybeans is 487 percent or 956 won/kg, whichever is greater.

Sources: USDA, Economic Research Service using Tariff Schedules of Korea, 2006; 

USDA, Foreign Agricultural Service reports KS1002 and KS 1013.
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Agricultural provisions of KORUS

The largest output of Korean agriculture, rice, is not subject to the proposed 

FTA. For 16 other tariff lines, trade will not be opened to unlimited quantities from the United States at zero tariffs, but TRQs will be set up specifically for limited imports from the United States. These commodities include 

oranges imported in September-February, powdered and evaporated milk, 

honey, fresh potatoes not for chipping, and soybeans for food manufacture 

and sprouting. Initially small, the TRQs will be raised by 3 percent per year, 

indefinitely.

For all other products, at some point Korea promises to allow all imports 

from the United States to enter with a zero tariff. The timeframe varies 

according to the product and can be as long as 17 years from when the TA 

enters into force.

The products from which the United States could gain the most from 

KORUS include those where tariffs are substantial, competition with Korean 

producers and foreign exporters is strong, and/or Korean demand responds 

strongly to lower prices. Exports from the United States that meet all three 

criteria are likely to be those that grow the most as the TA is implemented. 

When tariffs on U.S. products are reduced and eventually eliminated, the 

price of U.S. products in the Korean market should fall. At lower prices, 

U.S. products compete more effectively against domestic Korean and other 

imported products. Lower prices may also lead to increases in purchases of 

specific products by Korean consumers. 

Tariff reductions under the TA will allow U.S. products to be more competitive with those of countries currently benefiting from, or negotiating, reduced 

tariffs with Korea. Chile already has an FTA with Korea and has seen its 

pork exports to Korea grow strongly as tariffs facing Chilean pork have 

Note: Very low tariff includes wheat, corn, soybeans, cotton, and hides. 

Source: USDA, Economic Research Service using USDA's Foreign Agricultural Trade of the United States database. 

Figure 2

U.S. agricultural exports to Korea

1999 2000 01 02 03 04 05 06 07 08 09

0

1

2

3

4

5

6

Total

Very low tariff: < 3%

Billion dollars
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declined. The EU has negotiated an FTA with Korea, but it is not yet ratified 

or implemented. If the Korea-EU FTA takes effect, EU exports will have 

a tariff margin of preference over exports from the United States and other 

countries. 

Potential impact on U.S. agricultural exports 

Animal products. Model results show that growth in U.S. beef exports to 

Korea in response to tariff reductions will be the single largest commodity 

change, with over $550 million per year in new trade, or 29 percent of total 

U.S. agricultural trade growth (table 7). Beginning in the first year of implementation, tariffs facing U.S. beef would be reduced by about 2.7 percent per 

year, until they reach zero 15 years after implementation. It is important to 

note that trade liberalization in this analysis is interpreted as instantaneous 

removal or reduction of all tariffs. In reality, the pace of export growth may 

be affected over time by a safeguard mechanism in the agreement to address 

import surges. If triggered, this safeguard would impose a higher tariff on 

imports above the trigger level. The trigger level increases each year, and 

the tariffs imposed on trade above the trigger level decrease over time. It is 

expected that U.S. beef will become steadily more competitive with beef 

originating from Korea, Australia, and New Zealand.13 U.S. beef has proven 

popular in Korea in the past and accounted for about 10 percent of Korea’s 

beef market in 2007-09 (table 8). The ability of U.S. companies to source the 

particular cuts that Korean companies find most profitable is unparalleled 

because of the following factors:

•	The U.S. beef herd and slaughter numbers are the second largest in the

world; more slaughtered cattle can provide more of the specific cuts 

wanted in Korea.

•	Only countries completely free of foot-and-mouth disease can ship

uncooked beef and pork to Korea; this prevents much of Asia, South 

America, and Europe from shipping to Korea.

•	U.S. beef is predominantly grainfed, in contrast to the largely grassfed

cattle herds of Oceania. Korean consumers have shown a preference for 

grainfed beef. 

•	Cuts desired by Korean companies are often those that sell at a relatively

low price in the United States because of taste and culinary differences 

between the two countries.

Other U.S. meat exports (mainly pork) to Korea are estimated to increase 

substantially due to lower prices and consumer preferences for the cuts 

that can be sourced profitably from the United States. Pork bellies and 

bone-in chicken legs, for example, are more valuable in Korea than in the 

United States because of differing tastes and cooking techniques. Pork and 

poultry exports from the United States are expected to rise by over $275 

million per year, representing 14 percent of total U.S. agricultural export 

growth stemming from full KORUS implementation (see table 7). Korean 

tariffs on frozen U.S. pork will be zero as of January 1, 2016, if KORUS 

is implemented before then. Korean tariffs on imports of boneless chilled 

pork, frozen chicken legs, and frozen chicken offal from the United States 

will decrease to zero 10 years after implementation. In the case of chilled 

13Fabiosa et al. (2007) model a yearby-year scenario of the U.S.-Korea TA 

through 2016 and find a 19-percent 

expansion of U.S. beef exports by 2016. 

Although U.S. exports would still face 

a 30-percent tariff in 2016, the levy on 

competitors would be 40 percent.
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pork cuts, a safeguard mechanism may slow the growth of Korean imports 

by temporarily raising tariffs if annual trigger levels are exceeded. The 

increasing margins of preference accruing to U.S. exports of these products 

will help them compete with exports from the EU, Canada, and Chile (which 

already enjoys lower tariffs) and may also enhance U.S. competitiveness with 

Korean pork and poultry meat.14 14Fabiosa et al. (2007) estimate that 

partial liberalization of imports from the 

United States by 2016 would increase 

U.S. pork exports by 21 percent and 

poultry exports by 5.6 percent. Table 7

Projected effect on U.S. exports to Korea due to KORUS

Tariff 

average

Base

($ millions)

Change 

($ millions)

Percent 

change

Rice 450.0 48 -1 -2.8

Wheat 2.2 299 30 10.0

Other grains 0.0 1,237 -12 -1.0

Fruits and vegetables 51.5 281 133 47.3

Oilseeds 5.0 357 50 13.9

Cotton 1.0 116 14 12.3

Beef 37.3 701 563 80.3

Poultry and pork 24.9 291 276 94.9

Other livestock products 4.2 316 49 15.4

Oilseed products 6.8 90 34 37.3

Dairy products 44.0 64 93 145.9

Processed food and fish 18.4 926 404 43.7

Other agricultural products 46.6 237 301 127.0

Total agriculture 4,962 1,933 38.9

KORUS = U.S.-Korea Trade Agreement.

Source: USDA, Economic Research Service results of Global Trade Analysis Project modeling 

exercise for this study; base year is 2014.

Table 8

Korea’s animal product imports from the United States

Tariff Korean 

imports from 

U.S.

U.S. share of:1

Imports Market Competitors Phase-in

Percent $ millions Percent Years

Chilled and frozen beef 40 171 16 9 Korea, Australia, New Zealand 15

Chilled and frozen pork 22.5,252 206 29 9 Korea, EU, Canada, Chile 103

Frozen chicken meat and offal 20 38 51 4 Korea, Brazil 10, 122

Edible offal of cattle and swine 18 12 13 NA Australia, New Zealand, EU 153

Prepared/preserved meat and 

offal 27,30,722 13 10 NA Korea, China, Thailand, EU 15

Cheese 36 42 19 13 New Zealand, Australia, EU 10,12,152

NA = not available. 

1Trade and market data are the average for 2007-09. 

2Subcategories have different tariffs or phase-in periods.

3Some subcategories enjoy a zero tariff as of 1/1/2016. Others are phased in from the first implementation year. 

Sources: USDA, Economic Research Service using Tariff Schedules of Korea; USDA’s Production, Supply, and Distribution database; and official import data of Korea.
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Growth in exports of U.S. dairy products to Korea is projected to be 145 

percent, or more than $90 million per year (see table 7). Although Korean 

tariffs on milk powders from the United States in general are not reduced, the 

United States may gain from a small country-specific TRQ on powdered and 

evaporated milk that is duty free. In the case of cheese, a TRQ for Korean 

imports from the United States will grow each year, with zero duty within the 

TRQ. However, after 15 years, all U.S. exports become duty free (10 years, 

in the case of cheddar cheese). For butter and food whey, U.S.-specific TRQs 

provide duty-free access in addition to the existing WTO TRQs, and, after 10 

years, all U.S. exports of these products to Korea become duty free. Korea’s 

dairy industry is high cost relative to the U.S. industry, and the tariff advantages that the United States will receive will make its products more competitive against those of Oceania and the EU as well.

Growth in exports of animal products to Korea will contribute just over 50 

percent of the projected total U.S. agricultural export gains from the TA. 

Some of this growth will come from the existing exports of competing countries, and some will come from new Korean demand stimulated by lower 

prices. Because market share will likely be taken from Korean livestock and 

poultry industries, production of animal products in Korea is expected to 

fall, resulting in less need for feedstuffs such as corn and soymeal. Imports 

of those products are expected to decrease, including from the United States. 

The expected decrease, however, is only 1 percent per year.

Other products. The other half of U.S. agriculture’s export gains from full 

KORUS implementation is projected to come from exports of processed 

foods and fish products, other agricultural products, fruits and vegetables, 

oilseeds and oilseed products, wheat, and cotton.

Processed foods and fish exports may account for about 20 percent of the 

gains to U.S. agricultural exports to Korea. Processed foods include a large 

number of trade categories, and over $130 million of this trade is characterized simply as “other processed products.” Thus, a full description of the 

segment is difficult. Large, identifiable subcategories include processed fruits 

and vegetables, snack foods, and fruit juices (app. 2, table 2). Tariffs vary 

widely, from relatively low levels on chocolates to extremely high levels on 

some Korean specialty products. Korean firms manufacture many processed 

products, but global markets can supply even more types. In this highly 

competitive environment, duty-free access should benefit U.S. exporters.

Korea is a major fish-consuming and fish-harvesting country. U.S. fish 

product exports to Korea, centered on roe and surimi (fish paste) from 

Alaskan pollock, averaged about $300 million in 2007-09. Model results 

project an increase of over 40 percent in U.S. exports of processed foods and 

fish products if KORUS is fully implemented (see table 7).

“Other agricultural products” is a residual category with many parts. It 

includes beverages, tobacco, essential oils, sugar, and nursery products (app. 

2, table 2). U.S. exports of wine, tobacco products, waters, and other branded 

products to Korea could benefit from tariff reduction, especially in the face of 

competition from the EU and Oceania. Model results project an increase of 

over 100 percent in this category.
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U.S. fruit and vegetable exports to Korea are projected to grow by $133 

million per year as a result of KORUS (see table 7). U.S. exports, averaged over 2007-09, were dominated by $83 million in orange shipments 

and $88 million in nut exports (table 9). Oranges are not fully liberalized in 

the TA. The 50-percent tariff is retained in the September-February period, 

but a small TRQ with zero duty is set up for imports in that period from the 

United States. The TRQ grows by 3 percent in perpetuity. For the MarchAugust period, duties are reduced until they reach zero at the beginning of 

the seventh year after implementation. U.S. exports of nuts and other fruits 

would benefit from relatively early tariff reductions.

In sum, model results project a gain of over $1.9 billion per year in U.S. 

exports to Korea upon full TA implementation (see table 7). Of this increase, 

95 percent will occur in high-value food items such as livestock products, 

processed products, and fruits. Bulk commodities, such as wheat, corn, 

soybeans, and cotton, already face low tariffs and will be minimally affected 

by the TA. The increase in U.S. exports to Korea represents 39 percent 

growth over base levels. Earlier model results made by the USITC projected 

gains of $1.9 billion to $3.8 billion (USITC, 2007a).15 15This range was calculated by performing a systematic sensitivity analysis of the model with respect to two of 

its key parameters, the elasticities of 

substitution between domestic and imported varieties of goods and between 

different foreign suppliers of goods.

Table 9

U.S. fruit, vegetable, and nut exports to Korea

U.S. exports Tariff2 Phase-in

$ millions Percent Years

Fresh fruits 138

Oranges 83 50

Cherries 26 24 0

Other 29

Fresh vegetables 9 8-304 0-153

Frozen fruits 1 30 5-15

Frozen vegetables 2 27, 30 0-15

Nuts 88

Shelled walnuts 41 30 6

Shelled almonds 37 8 0

Others 9

1Trade data are averages for 2007-09. 

2Frozen vegetable tariffs are either 27 or 30 percent.

3Tariffs on potatoes, not for chipping or seed, are not cut in the agreement.

Sources: USDA, Economic Research Service calculations using Tariff Schedules of Korea 

and USDA’s BICO (bulk, intermediate, and consumer) database.
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Total U.S. imports of agricultural products from Korea are estimated to 

increase about $60 million per year (table 10). Growth in imports of agricultural products from Korea would primarily be in processed products, which 

currently face U.S. tariffs of about 6 percent. Ethnic foods, such as biscuits, 

savory snack foods, ramen noodles, and seaweed products, would account for 

the bulk of the increase.

Table 10

Projected effect on U.S. imports from Korea due to KORUS

Tariff 

average Base Change

Percent 

change

----$ millions----

Rice 7.0 2.8 1.5 53.8

Wheat 0.0 0.0 0.0 0.0

Other grains 0.0 0.1 0.0 4.5

Fruits and vegetables 1.0 41.4 0.6 1.5

Oilseeds 10.1 0.4 0.2 52.4

Cotton 0.0 0.1 0.0 0.0

Beef 0.0 0.6 0.0 2.6

Poultry and pork 2.5 1.3 0.2 14.6

Other livestock products 0.2 3.2 0.1 2.8

Oilseed products 4.1 0.8 0.6 65.8

Dairy products 48.1 4.8 11.0 228.5

Processed foods 5.5 184.3 28.2 15.3

Beverages and tobacco products 6.2 100.9 17.1 16.9

Total agriculture 340.7 59.4 17.4

KORUS = U.S.-Korea Trade Agreement.

Source: USDA, Economic Research Service results of Global Trade Analysis Project

modeling exercise for this study; base year is 2014.
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The U.S-Colombia Trade Promotion Agreement 

(CTPA)

Structure of agricultural trade

Colombia was the second largest South American market for U.S. farm 

products in 2007-09 and the 21st most important market for U.S. agriculture 

overall. U.S. shipments of corn, wheat, soybeans, cotton, and soybean meal 

topped the list, accounting for over three-quarters of total exports (table 11). 

During 2007-09, U.S. products accounted for 39 percent of Colombia’s $3.5 

billion annual agricultural import market. Other major exporters to Colombia 

were Argentina, Brazil, Canada, Chile, the EU, and members of the Andean 

Common Market (Bolivia, Ecuador, and Peru). 

U.S. agricultural imports from Colombia averaged $1.7 billion in 2007-09, 

making it the 12th largest agricultural exporter to the United States. Leading 

imports were coffee, cut flowers, bananas and plantains, coffee extracts, 

and candies and chewing gum. The United States ran a negative agricultural 

trade balance (more imports than exports) with Colombia, averaging over 

$440 million during 2007-09. The negative trade balance had been narrowing 

considerably in recent years but increased in 2009 as a result of the sharp 

drop in U.S. exports. Colombia had been a rapidly expanding market for U.S. 

agricultural exports until very recently, growing at a 40-percent annual rate 

between 2004 and 2008. In 2008-09, however, U.S. agricultural exports to 

Colombia dropped from $1.6 billion to $900 million, or 46 percent. In 2009, 

trade values declined worldwide as prices dropped from the high levels of 

2008. Colombia was no exception, with its total agricultural imports in 2009 

dropping 16 percent from the previous year. The U.S. share of Colombian 

imports also declined sharply, with much of this decline being filled by 

Table 11

Composition of U.S. agricultural trade with Colombia, 2007-09 averages

Product

Main U.S. exports

Product

Main U.S. imports

Value Share of total Value Share of total

$ millions Percent $ millions Percent

Corn 455.9 35.9 Coffee 738.1 43.0

Wheat 227.0 17.9 Cut flowers and foliage 515.2 30.1

Soybeans 95.8 7.5 Bananas, including plantains, fresh or dried 200.7 11.7

Cotton 64.0 5.0 Coffee extracts 38.1 2.2

Soybean meal 63.1 5.0 Candies and chewing gum 26.5 1.5

Corn gluten meal 43.4 3.4 Crude animal material (glue stock) 25.8 1.5

Food preparations 37.4 2.9 Sugar, raw and refined 23.7 1.4

Soybean oil 26.4 2.1 Baked products and pastries 20.9 1.2

Pet food 21.9 1.7 Food preparations 15.4 0.9

Soybean flour 15.9 1.3 Tobacco products 15.0 0.9

Subtotal, top 10 1,050.6 82.7 Subtotal, top 10 1,619.5 94.5

All other agricultural products 219.9 17.3 All other agricultural products 95.1 5.5

Total 1,270.5 100.0 Total 1,714.6 100.0

Source: USDA, Economic Research Service using U.S. International Trade Commission’s Dataweb. 
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additional Colombian imports from the MERCOSUR countries, particularly 

Argentina and Brazil (fig. 3). 

Colombia has an FTA with the MERCOSUR countries, the agricultural 

provisions of which entered into force on January 1, 2009. In the case 

of corn, this allowed 2009 imports from Argentina and Brazil to pay a 

7.6-percent duty while imports from the United States paid 15 percent 

(USDA, FAS, 2010b). In October 2010, the tariff on imports from the 

United States dropped to 5 percent, while that on imports from MERCOSUR 

countries dropped to zero, as the effect of higher international prices for 

corn produced a lower rate under the “price band” calculation (USDA, 

FAS, 2010c). 16 In the case of wheat imports, the tariff preference for 

MERCOSUR is even greater, with Argentine wheat entering duty free, while 

U.S. wheat pays a 17-percent duty (USDA, FAS, 2010a). The effect of the 

FTA between Colombia and the MERCOSUR countries on U.S. agricultural 

exports is clearly very different from that of the two ASEAN FTAs. In the 

case of ASEAN, a significant portion of U.S. exports already enters duty free, 

whereas all U.S. agricultural exports to Colombia face a duty. Further, a large 

portion of dutiable U.S. agricultural exports to ASEAN faced limited competition from China, Australia, or New Zealand. The most important U.S. 

exports to Colombia compete head-to-head with exports from MERCOSUR, 

and the tariffs MERCOSUR countries face have been declining gradually. 

In 2009, the margins of preference that MERCOSUR imports receive finally 

started having an effect on the competitive position of the United States, a 

position that could soon be further eroded if the Canada-Colombia FTA and 

the EU-Colombia FTA enter into force and competing exports from these 

countries start receiving preferential treatment. 

16Price bands serve to insulate 

producers and processors from trade 

competition when the world price for 

an imported good falls below a calculated reference price. Under the price 

band system, variable monthly duties, 

which may be positive or negative, are 

imposed on top of ad valorem tariffs to 

keep domestic prices within a predetermined range.

MERCOSUR = Common Market of the South.

Source: USDA, Economic Research Service using trade data in the Global Trade Atlas database. 

Figure 3

Change in U.S. and MERCOSUR market shares in Colombia between 2008 and 2009 

Percent

Corn Soybean oil Soybean meal Soybeans Wheat

-50

-40

-30

-20

-10

0

10

20

30

40

50

MERCOSUR

United States
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Agricultural provisions of CTPA

Colombia currently applies tariff protection on all U.S. agricultural imports, 

with rates ranging from 5 to 80 percent. Under WTO rules, Colombia could 

raise these rates to their bound levels, which range from 15 to 227 percent. 

In addition, some agricultural products imported by Colombia are subject to 

additional duties imposed on top of the applied ad valorem tariff. This policy, 

which utilizes a price-band system to generate variable duties, is designed to 

keep domestic prices within a predetermined range. U.S. exports to Colombia 

that are subject to the price-band system include corn, wheat, rice, soybeans, 

pork, poultry, cheeses, and powdered milk. 

Under the pending CTPA, the United States would receive immediate dutyfree access on 78 percent of Colombian agricultural tariff lines accounting 

for almost 50 percent of 2007-09 U.S. agricultural exports to Colombia. This 

would apply to high-quality beef, wheat, soybeans, soybean meal, cotton, 

grapes, apples, pears, peaches, cherries, and many processed food products, 

including fruit juices, beer, wine, frozen french fries, breakfast cereals, and 

cookies. Colombia would eliminate most other tariffs on agricultural products 

within 15 years. Exceptions include poultry (spent fowl and chicken leg quarters) and rice, whose tariffs go to zero in 18 years and 19 years, respectively.

Other products whose tariff cuts would be subject to the longest implementation periods include pork, standard quality beef, corn, some fruits and 

vegetables, processed products, and dairy products. These also tend to be 

the products on which the highest applied rates are levied. The agreement 

would also provide duty-free TRQs on standard quality beef, variety meats, 

chicken leg quarters, spent fowl (chickens), dairy products, dried beans, corn, 

sorghum, glucose, pet food, animal feeds, rice, and soybean oil. The TA 

would also remove Colombia’s price-band system upon implementation of 

the agreement. However, if the rates under the price-band system result in a 

rate below the MFN tariff, and this also happens to be lower than the preferential tariff under CTPA, the United States will be allowed to sell the product 

to Colombia at the lower rates.

The United States currently extends duty-free treatment to most imports from 

Colombia under the ATPA, a regional trade preference program. As a result, 

during 2007-09, 99.8 percent of Colombia’s exports to the United States 

entered duty free. The pending CTPA would make these trade preferences 

permanent. During 2007-09, Colombia was assessed duties estimated at 

about $965,000 on U.S. imports of $9.8 million (USITC 2010 dataweb). The 

majority of dutiable trade occurred in sugar and sugar-containing products, 

dairy products, and tobacco. Currently, Colombian exports of these products are charged a duty if they exceed the U.S. TRQ quantities. Under the 

TA, the United States would provide additional duty-free TRQs on imports 

of Colombian beef, dairy products, tobacco, and sugar.17 For the first three 

categories of products, the duty-free amounts increase over time, but within 

15 years (less for some products), Colombia will have duty-free, quota-free 

access for all imports. In the case of sugar and specified sugar-containing 

products, the United States would triple Colombia’s access to the U.S. sugar 

market in the first year of the agreement, from its historic 2.3-percent share 

of the U.S. raw cane sugar TRQ (25,273 metric tons), through the creation 

of an additional quota of 50,000 metric tons. Beginning in year 2, this new 

17These TRQs are in addition to 

those the United States created under 

the Uruguay Round Agreement on 

Agriculture.
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quota would expand by 750 metric tons annually in perpetuity. Sugar imports 

in excess of these quotas would continue to be charged the over-quota MFN 

tariff, which can exceed 100 percent in some years. 

Potential impact on U.S. agricultural exports 

The United States has consistently had a trade deficit with Colombia over the 

past decade in both agricultural and nonagricultural goods. About 75 percent 

of imported agricultural products from Colombia consist of coffee beans and 

cut flowers that enter the United States with zero tariffs. Nearly 80 percent of 

nonagricultural imports from Colombia comprise coal and oil and face very 

low tariffs. The CTPA would narrow the trade deficit because of improved 

U.S. access to a more open market, while additional imports would be 

minimal because most products already enter the U.S. market duty free. 

As previously discussed, the U.S. market share in Colombia has fallen for 

some commodities due to greater competition from Brazil and Argentina 

as well as from Canada and Chile. Despite increased competition and 

declining market share, total U.S. agricultural exports to Colombia are 

expected to be sustained at about $900 million per year through 2014 

without the CTPA, as a result of continued strong global prices for grains 

and oilseeds, particularly corn. 

It is likely that U.S. agricultural exports will benefit broadly with full implementation of the CTPA. This is because Colombia maintains sizeable tariffs 

across a wide spectrum of both bulk commodities and high-value products. 

Model results suggest that overall U.S. agricultural exports to Colombia will 

increase by 44 percent, or $370 million per year (table 12). The USITC estimates that U.S. agricultural exports to Colombia would grow by 24 percent, 

Table 12

Projected effect on U.S. exports to Colombia due to CTPA

Tariff average Base Change Percent change

----$ millions----

Rice 50.6 3.9 28.6 739.2

Wheat 12.5 149.0 90.1 60.5

Other grains 14.9 287.1 69.3 24.1

Fruits and vegetables 14.6 13.9 2.5 17.9

Oilseeds 10.1 67.6 18.1 26.7

Cotton 10 28.2 9.6 34.1

Beef 21.7 21.4 17.5 82.0

Poultry and pork 19.8 28.0 18.1 64.6

Other livestock products 13.7 6.2 2.4 38.1

Oilseed products 15.5 41.2 52.1 126.3

Dairy products 18.3 4.4 2.3 53.3

Processed foods 15 184.4 55.9 30.3

Other agricultural products 9.4 17.0 4.1 24.2

Total agriculture 852.2 370.7 43.5

CTPA = Colombia Trade Promotion Agreement.

Source: USDA, Economic Research Service results of Global Trade Analysis Project modeling 

exercise for this study; base year is 2014.
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or $170 million per year (USITC, 2006). Jurenas (2009) cites a study by the 

American Farm Bureau Federation that estimates an annual increase of $693 

million in U.S. agricultural exports to Colombia following implementation of 

the CTPA. 

Among the Colombian grain sectors, rice is most heavily protected, with 

a tariff average of 51 percent. The United States would compete directly 

with rice exports from Peru and Ecuador in the Colombian market. U.S. 

rice exports to Colombia could increase annually by nearly $30 million, 

or about 740 percent, as a result of the elimination of the tariff on rice. In 

the last decade, the United States has been the leading supplier of wheat to 

Colombia. Other suppliers include Canada and Argentina. The U.S. wheat 

share of the Colombian market has fallen since 2008, and this trend will 

likely continue as long as U.S. wheat faces a 17-percent tariff. However, with 

the CTPA, U.S. wheat exports to Colombia would likely increase by more 

than 60 percent, regaining some market share lost to Argentina and Canada. 

The United States has traditionally been the major supplier of corn to 

Colombia. However, the United States is now facing significant competition 

from Argentina. In both 2009 and the first part of 2010, Colombia imported 

more corn from Argentina than it imported from the United States. This shift 

is due mainly from a price advantage Argentina enjoys as a result of tariff 

reductions for Argentine corn provided under the Colombia-Mercosur FTA. 

With the removal of the tariff, annual U.S. corn exports to Colombia would 

likely increase 24 percent, or about $70 million. 

Despite having lost market share to Argentina and Paraguay in the 

Colombian soybean market in 2010, the United States continues to be 

the leading supplier of soybeans to Colombia. The United States also has 

remained the leading supplier of cotton to Colombia. Given that the United 

States is the dominant supplier and tariffs are relatively low, the removal of 

tariffs would modestly expand U.S. exports of both soybeans and cotton. 

Colombia has maintained high tariffs on most livestock products, including 

beef, poultry, pork, and dairy products. The United States supplies about 

50 percent of Colombia’s beef (including fats of bovine origin), with the 

remainder coming from other South American countries. It is likely that 

U.S. exports of beef to Colombia will rise by more than 80 percent after the 

elimination of tariffs in the CTPA. The United States competes directly with 

Chile and Canada for exports of pork to Colombia. Currently, U.S. pork and 

poultry meat faces an average MFN tariff of nearly 20 percent in Colombia. 

The elimination of tariffs on U.S. exports would likely increase U.S. exports 

of these products by more than 60 percent. The MFN tariff faced by U.S. 

dairy product exports to Colombia currently averages about 18 percent. The 

scheduled elimination of these tariffs is estimated to increase U.S. exports by 

an additional 50 percent.

Colombian demand for soybean meal has grown as a result of increased 

feed demand by the country’s poultry sector. However, the U.S. share of 

Colombia’s soybean meal market plummeted from 60 percent in 2008 to 8 

percent in 2010, whereas Argentina increased its share from 31 to 84 percent 

over the same period. The United States faces an average tariff for oilseed 

products of nearly 16 percent in the Colombian market. The full implemen-
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tation of the CTPA would likely more than double U.S. exports of oilseed 

products and make them more competitive with Argentina’s exports.

Colombia’s imports of processed food products comprise a wide array of 

items, including confectionery products and ingredients used in Colombia’s 

food manufacturing industry. The United States faces an average tariff of 15 

percent on processed food items. Elimination of the tariff from the CTPA 

would likely increase U.S. exports of these products to Colombia by 30 

percent, or $52 million per year. 

U.S. agricultural imports from Colombia would increase about 6 percent, or 

$117 million per year, following implementation of the CTPA (table 13). 

Nearly all of the increase would be from an expansion of the U.S. sugar 

quota, accounting for $108 million over a 10-year period. U.S. dairy imports 

would also increase following the elimination of over-quota tariffs on 

Colombian dairy products. This would likely result in an annual increase of 

about $3 million in additional U.S. dairy imports from Colombia. 

Table 13

Projected effect on U.S. imports from Colombia due to CTPA

Tariff average Base Change Percent change

----$ millions----

Rice 0.0 0.2 0.01 6.5

Wheat 0.0 0.0 0.00 0.0

Other grains 0.0 0.2 0.00 2.5

Fruits and vegetables 0.0 233.2 0.03 0.0

Oilseeds 0.0 0.0 0.02 0.0

Cotton 0.0 0.1 0.02 38.0

Beef 0.0 0.3 0.04 14.1

Poultry and pork 0.0 0.7 0.01 2.0

Other livestock products 0.0 23.9 0.29 1.2

Oilseed products 0.0 4.3 0.57 13.3

Dairy products 41.2 1.5 2.78 181.8

Processed foods 0.0 320.2 5.02 1.6

Other agricultural products 0.0 1,467.3 107.72 7.3

Total agriculture 2,048.0 116.53 5.7

CTPA = Colombia Trade Promotion Agreement.

Source: USDA, Economic Research Service results of Global Trade Analysis Project modeling 

exercise for this study; base year is 2014.
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The U.S.-Panama Trade Promotion Agreement (PTPA)

Structure of agricultural trade

The United States runs a positive agricultural trade balance with Panama, 

averaging over $330 million per year during 2007-09, which helps rank 

Panama as 45th among overseas U.S. markets (table 14). Leading U.S. 

exports to Panama were corn, soybean meal, wheat, rice, and food preparations, which together accounted for over 55 percent of all U.S. sales. The 

United States accounted for almost 50 percent of Panama’s $2.5 billion agricultural imports during this period. Major U.S. competitors for trade with 

Panama were Costa Rica, Mexico, and Guatemala.

U.S. imports from Panama averaged $52 million per year during 2007-09, 

placing Panama 65th as a supplier of agricultural commodities to the United 

States. Leading U.S. imports were sugar, coffee, pineapple, melons, and 

bananas. 

Agricultural provisions of PTPA

During 2007-09, one-third of U.S. agricultural exports entered Panama’s 

market duty free, including soybeans, soymeal, wheat, and fresh grapes. 

About one-half of the remaining exports faced tariffs between 1 and 15 

percent, but some key products were subject to much higher rates, including 

corn at 40 percent, rice at 90 percent, and chicken leg quarters at 260 percent. 

Under PTPA, an additional 24 percent of U.S. agricultural exports to Panama 

would receive immediate duty-free treatment, including high-quality beef, 

mechanically deboned chicken, frozen whole turkeys and turkey breasts, 

pork variety meats, whey, crude vegetable oils, most fresh fruits (including 

Table 14

Composition of U.S. agricultural trade with Panama, 2007-09 averages

Product

Main U.S. exports

Product

Main U.S. imports

Value Share of total Value Share of total

$ millions Percent $ millions Percent

Corn 75.5 19.7 Sugar, raw and refined 17.1 33.0

Soybean meal 50.7 13.2 Coffee 12.3 23.7

Wheat 33.9 8.8 Fresh or dried pineapples 5.7 10.9

Food preparations 33.0 8.6 Fresh melons (excluding watermelons) 3.3 6.4

Rice 20.6 5.4 Nonalcoholic beverages 2.2 4.3

Grain products 14.0 3.7 Fresh or chilled pumpkins and squash 2.1 4.1

Cocoa beans and products 14.0 3.6 Bananas, including plantains, fresh or dried 2.0 3.8

Vegetables: preparations 7.3 1.9 Baked products and pastries 1.9 3.7

Whiskies 7.3 1.9 Rum and taffia 0.9 1.7

Cheese 6.9 1.8 Cocoa beans and products 0.9 1.6

Subtotal, top 10 263.2 68.6 Subtotal, top 10 48.4 93.2

All other agricultural products 120.5 31.4 All other agricultural products 3.5 6.8

Total 383.8 100.0 Total 52.0 100.0

Source: USDA, Economic Research Service using U.S. International Trade Commission’s Dataweb. 
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apples and pears), almonds, walnuts, raisins, prunes, many processed food 

products (including soups and chocolate confectionery), distilled spirits, 

wine, and pet food. Currently, the tariffs on these items entering Panama 

range from 5 to 15 percent.

Under PTPA, Panama agreed to establish preferential TRQs for imports 

of U.S. pork, lard, specified processed pork products, chicken leg quarters, 

specified dairy products, fresh potatoes, frozen french fries, onions, corn, 

rice, refined corn oil, dried beans, and tomato paste. Quotas for these importsensitive commodities would be phased out in 5 to 20 years. The longest 

transition period (20 years) would apply to rice, Panama’s most sensitive 

agricultural commodity. However, Panama agreed to increase duty-free 

access for U.S. rice if needed to cover a shortfall in domestic output. Border 

protection on U.S. chicken leg quarters would end in year 18. Quotas to be 

created for fresh or chilled onion and fresh or chilled potatoes would expand 

by 2 percent annually in perpetuity with MFN over-quota tariffs applying to 

imports that exceed quota amounts. 

Almost all of Panama’s agricultural exports to the United States already 

enter duty free under the CBERA trade preference program. Under PTPA, 

the United States would provide additional duty-free TRQs on imports of 

Panamanian dairy products and sugar. For dairy products, the duty-free 

amounts increase over time, and after 15-17 years, Panama will have dutyfree, quota-free access for all dairy imports. In the case of sugar and specified 

sugar-containing products, the United States would increase Panama’s access 

to the U.S. sugar market in the first year of the agreement, from its historic 

2.7-percent share of the U.S. raw cane sugar TRQ (30,540 metric tons), 

through the creation of two additional quotas of 505 (on raw and refined 

sugar and syrups) and 6,060 metric tons (on raw cane sugar). Beginning 

in year two, these new quotas would expand annually by 5 and 60 metric 

tons, respectively, for 10 years. The larger of the two quotas would then be 

capped at 6,600 metric tons, while the smaller would continue to increase by 

5 metric tons per year in perpetuity. Sugar imports in excess of these quotas 

would continue to be charged the over-quota MFN tariff, which can exceed 

100 percent in some years. 

Potential impact on U.S. agricultural exports 

Panama’s trade flow data in the GTAP model are biased by the large quantities of imports and exports passing through the country’s Colon Free Zone. 

This made it impracticable to use GTAP for this analysis.

The USITC employed a partial equilibrium model that simulates the effects of 

changes to tariffs and TRQs on trade between the United States and Panama 

in specified goods (USITC, 2007b). It estimated that annual U.S. exports of 

agricultural commodities and processed foods to Panama would be $46 million 

higher (or about 20 percent above the 2006 level) when the agreement is fully 

implemented. This increase was largely attributed to gains in exports of rice 

($13.8 million), corn ($7 million), processed foods ($9.6 million), frozen 

potatoes ($1 million), and meats ($4.4 million). Given the size of the tariffs 

currently levied on these products and the share of the Panamanian import 

market currently accounted for by U.S. exports, we believe these figures are 

within the ranges we would expect as a result of implementing the PTPA.
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Conclusions

The principal objective of bilateral and regional free trade agreements is to 

secure trade liberalization and expand market access for members. But the 

discriminatory nature of FTAs may result in FTA members expanding their 

trade at the expense of nonmembers, who may become less competitive 

purely on the basis of facing a higher tariff than the members. 

Most studies of the effects of FTAs find that trade diversion is less apparent 

than might be expected. While overall trade diversion does not appear to 

be a major concern in the economic literature, within some agreements or 

within specific sectors of some agreements, it can be significant. This study 

finds that in the case of the recently implemented FTAs between the ASEAN 

countries and China, Australia, and New Zealand, the potential for U.S. agricultural exporters to be affected as a result of trade diversion is modest. This 

is because a large portion of U.S. exports to these countries already faces 

duty-free or minimal tariffs. Where tariffs are significant, the United States 

often faces only minimal competition from FTA members. 

By contrast, our analysis of the pending U.S. trade agreement with Colombia 

reveals a different story. Colombia has been active in negotiating additional 

FTAs with some key U.S. competitors. One of these FTAs, with the four 

members of MERCOSUR, has already had significant effects on U.S. agricultural exports and market shares in the Colombian market. A majority of 

U.S. agricultural exports to Colombia compete head-to-head with exports 

from MERCOSUR countries. The U.S. market position in Colombia could 

soon be further eroded if the Canada-Colombia FTA and the EU-Colombia 

FTA enter into force and competing exports from these countries receive 

duty-free treatment. Duty-free access to the Colombian market would help 

maintain and improve the competitive position of U.S. producers. 

Korea is also negotiating FTAs with the EU and Australia, two important 

competitors of the United States in the Korean market. In beef exports, where 

large U.S. gains are expected from a U.S-Korea trade agreement, the United 

States competes with Australia. Likewise, in pork and processed foods, two 

additional expected sources of U.S. export gains, the United States competes 

directly with the EU.

Exports are very important to U.S. agriculture. While the overall scale of 

gains in an individual trade agreement is limited compared with the potential 

gains in a multilateral agreement, U.S. trade agreements can, indeed, provide 

opportunities for additional U.S. agricultural sales overseas. Model results 

indicate that U.S. agricultural exports would increase by $1.9 billion per year 

if KORUS was implemented, $370 million per year if the CTPA was implemented, and $46 million if the PTPA was implemented.
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Appendix 1 – Projecting a 2014 Benchmark 

The FTAs in this report are agreements in which preferential trade liberalization is undertaken reciprocally between the participating countries. The 

GTAP modeling framework provides a useful tool for assessing effects of 

FTAs because it is comprised of explicit bilateral trade flows between the 

United States and all trading partners. The model captures domestic and 

foreign economic activity for all countries and in all goods and services. 

Impacts of an FTA depend most importantly on pre-existing trade flows and 

the reduction in tariffs and TRQs. 

Because the data are historical in the GTAP framework, this can misrepresent current trade patterns. The current public release of the GTAP 

Data Base (version 7) depicts the world economy as of 2004. Since 2004, 

there have been several global economic shocks affecting trade, including 

increased energy and agricultural commodity prices, a worldwide financial 

crisis, and outbreaks of livestock diseases. Global trade patterns have also 

shifted considerably with China’s ongoing rapid economic growth. Also 

supporting U.S. agricultural exports is the cumulative effect of the depreciated U.S. dollar. This depreciation of the dollar makes U.S. agricultural 

exports increasingly competitive in international markets. U.S. agricultural 

exports rose from $62 billion in 2004 to $108 billion in 2010. There are 

also commodity-specific shifts in trade patterns. Trade in meat has changed 

dramatically since 2004. This is especially true for exports of beef and other 

meat exports to Korea. Despite beef exports hampered by BSE (Bovine 

Spongiform Encephalopathy) restrictions, U.S. agricultural exports to Korea 

have nearly doubled since 2004. 

One of the challenges of assessing pending TAs is that it is not possible 

to predict exactly when each TA will be ratified. In addition, there is also 

a “phase-in” period once a TA is signed into law. Assumptions regarding 

the approximate timing are needed to quantify the effects of TAs. It is 

assumed that if ratified TAs were to be implemented in the near future, most 

tariffs would be reduced by 2014. In this study, the year 2014 serves as a 

benchmark year for the analysis of the pending U.S. TAs with Korea and 

Colombia. 

The GTAP framework can be used to generate a future base period by simulating economic growth over several years, and it can be used to simulate the 

effect of policy reforms in a future year. In this study, we perform a growth 

simulation to update the base year period prior to performing trade policy 

simulations for TAs. This is done by using predetermined rates of economic 

growth for all regions. In doing so, we use the model to establish a new 

benchmark year (2014) and for estimating the future effects of the TAs being 

phased in beyond 2014. 

To assess the impact of pending TAs, it was necessary in this study to simulate world trade, production, and consumption as they would likely appear 

in 2014, when implementation of TAs might take place provided the agreements are ratified. The re-benchmarking of GTAP was taken in two steps. 

First, macroeconomic variables are updated for all countries and sub-regions 

in the model. This information was drawn from USDA’s macroeconomic 

projections (USDA, 2010). Gross domestic product and population changes 
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are based on observed changes from 2004 to 2009 with projections made 

from 2010 to 2014 (tables A1.1 and A1.2). Macroeconomic assumptions 

underlying USDA’s long-term projections reflect a slow transition back 

toward steady growth at longrun sustainable rates in 2011 and beyond. 

Global growth is projected to average 3.3 percent in 2010 through 2014. The 

accelerated growth is mostly due to high growth rates in emerging market 

countries such as China and India. Each country/region reaches a predetermined GDP level in 2014. In the growth simulation GDP, the economy-wide 

stock of capital and labor supply are exogenous while total factor productivity is endogenous. In general, developing countries are the main source of 

growth in world agricultural demand and trade. Income growth in developing 

Table A1.1

Gross domestic product levels and growth rates

2004 2009 2014

Annual growth, 

2004-09

Annual growth, 

2009-14

---------------------$ billions--------------------- -----Percent change-----

United States 12,264 13,006 14,917 1.2 2.8

Korea 813 927 1,123 2.7 3.9

Colombia 114 140 166 4.2 3.5

Panama 15 21 29 7.6 6.8

EU 27 13,376 13,896 15,064 0.8 1.6

China 2,084 3,339 4,999 9.9 8.4

India 699 1,018 1,469 7.8 7.6

Other Latin America 2,520 2,930 3,537 3.1 3.8

Other Asia and Oceania 7,432 7,921 9,075 1.3 2.8

Rest of world 4,200 4,936 5,970 3.3 3.9

World 43,515 48,134 56,349 2.0 3.2

Source: USDA, Economic Research Service. 

Table A1.2

Population level and growth rates

2004 2009 2014

Annual growth, 

2004-09

Annual growth, 

2009-14

---------------------Millions--------------------- -----Percent change-----

United States 293 307 322 0.96 0.97

Korea 48 49 49 0.27 0.22

Colombia 41 44 46 1.31 1.15

Panama 3 3 4 1.60 1.43

EU 27 488 492 494 0.14 0.08

China 1,299 1,339 1,385 0.60 0.68

India 1,074 1,157 1,236 1.50 1.34

Other Latin America 505 539 571 1.30 1.18

Other Asia and Oceania 1,151 1,222 1,291 1.21 1.09

Rest of world 1,485 1,617 1,754 1.71 1.65

World 6,387 6,768 7,153 1.16 1.11

Source: USDA, Economic Research Service.
45

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countries increases the demand for food more than in developed countries 

because a larger share of income is devoted to food consumption. 

The second step of the benchmarking exercise is to realign commodityspecific trade flows to better reflect observed trends in trade flows. Although 

income growth provides the foundation for world demand and trade for 

agricultural products, in some cases commodity shifts in trade take place 

for other reasons. For example, a gradual recovery took place for U.S. beef 

exports to Japan and Korea, which were markets that were closed to the 

United States following the first U.S. case of bovine spongiform encephalopathy (BSE). U.S. exports of beef to Korea were set at their 2003 level 

for 2014 (app. fig. 1). Korea also became Asia’s fastest growth market for 

pork with its imports accounting for one-fifth of the increase in world pork 

imports. Increasing per capita consumption of poultry in Korea, combined 

with environmental restrictions on expanding production in Korea is contributing to strong import growth. Global trade in soybean and soybean products has risen rapidly since 2004, surpassing both the volume of wheat and 

coarse grains. U.S. exports of soybeans rose from 25 million tons in 2004 

to 40 million tons in 2009, largely from strong demand in China. Argentina 

is now the dominant supplier of soybean meal and soybean oil exports and 

continues to increase its share in the world market. Alterations to reflect these 

fundamental changes were made to the GTAP trade data to better depict trade 

patterns for the year 2014. 

Source: USDA, Economic Research Service using trade data in the Global Trade Atlas 

database. 

Appendix figure 1

Korean beef imports

$ millions

2002 03 04 05 06 07 08 09 10

0

200

400

600

800

1,000

United States

Australia

New Zealand

Rest of world
46

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Appendix 2—Tables

Table A2.1

ASEAN FTAs, summary of tariff line commitments1

Bound duty free Duty free in 

first year2

Duty free by 

last year3

Partially 

liberalized2 Excluded Total tariff lines

No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct.

ASEAN-China

China 70 6 963 87 0 0 50 5 22 2 1,105 100

Indonesia 0 0 1,091 93 0 0 0 0 85 7 1,176 100

Malaysia 107 9 1,050 87 0 0 13 1 33 3 1,203 100

Philippines 0 0 1,045 82 70 5 32 3 130 10 1,277 100

Thailand 29 2 1,057 87 0 0 66 5 67 5 1,219 100

Vietnam 95 9 341 31 663 60 0 0 0 0 1,099 100

ASEAN-Australia/New Zealand

Australia 231 31 524 69 2 0 0 0 0 0 757 100

New Zealand 460 45 544 53 19 2 0 0 0 0 1,023 100

Indonesia 0 0 990 79 113 9 63 5 92 7 1,258 100

Malaysia 107 9 886 74 127 11 20 2 65 5 1,205 100

Philippines 0 0 549 43 624 49 72 6 36 3 1,281 100

Thailand 29 2 460 38 623 51 0 0 107 9 1,219 100

Vietnam 95 8 33 3 954 81 76 6 24 2 1,182 100

ASEAN = Association of Southeast Asian Nations. FTA = free trade agreement. 

1The table contains a count of simple tariff lines (not trade weighted) at the tariff line level (the HS8-digit level for China, the Philippines, Thailand, Australia, and New Zealand; the HS9 digit level for Malaysia; and the HS10-digit level for Indonesia and Vietnam).

2Includes cuts made under the Early Harvest Program.

3Duties that are cut to zero by the end of the FTA’s implementation period.

Source: USDA, Economic Research Service.
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Table A2.2 

Sensitive tariff lines under the ASEAN-Australia/New Zealand and ASEAN-China FTAs—continued

ASEAN country tariff lines excluded from cuts or partially liberalized under the ASEAN-Australia/New Zealand FTA

Indonesia Malaysia Philippines Thailand Vietnam

IBAT description Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Ag products: misc 85.0 2

Beverages: beer 40.0 2 2 410.5 2 2 40.0 2

Beverages: brandy 170.0 4 4 470.7 2 2 40.0 4

Beverages: cider 143.3 6 6 421.9 8 8 40.0 5

Beverages: distilled spirits nes 137.1 17 17 611.0 11 11 29.7 17

Beverages: gin 170.0 2 2 1,014.5 1 1 40.0 2

Beverages: nonalcoholic 20.0 4 4 4

Beverages: rum 170.0 2 2 1,109.8 1 1 40.0 2

Beverages: whiskey 170.0 2 2 372.0 1 1 40.0 2

Beverages: wine 148.7 15 15 180.1 8 8 28.0 15

Cocoa powde 5.0 1

Coffee husks & skins 30.0 2 2 2

Coffee mixtures & extracts 40.0 3 3 3

Coffee: not roasted 30.0 4 4 4

Coffee: roasted 30.0 4 4 4

Crude animal material 7.5 1

Crude vegetable material 30.0 1 1 1 5.0 2 2

Dairy: butter 5.0 1

Dairy: cheese 4.0 2

Dairy: fluid milk & cream 4.0 2 20.0 3 3 3

Dairy: milk & cream, pwdr & 

cndnsd 4.0 4 4 20.0 2 2 2

Dairy: other milk products 4.0 3 5.0 1

Eggs 5.0 4 4 4

Feed: pet food 5.0 3

Feed: waste & residues nes 5.0 1

Fiber: silk 30.0 1 1 1

Food prep: composite mixtures 85.0 8

Fruit (dried & frsh): coconuts 20.0 2 2 2

Fruit (frsh): avocados & 

mangoes 8.3 2 5.0 3

Fruit (frsh): bananas 4.0 1 5.0 5

Fruit (frsh): berries 4.0 1

Fruit (frsh): citrus nes 18.8 1 32.0 1

Fruit (frsh): melons 5.0 4

Fruit (frsh): pineapples 4.0 1 9.0 1

Grain prod: breakfast cereal 5.0 1

Grain prod: flour (non-wheat) 9.0 1 1

Grain prod: meal 5.0 1

Grain prod: starch (corn) 5.0 1

Grain: corn 5.0 1 1 34.0 2 2 20.0 2 2 2

Grain: rice (unmilled) 21.8 4 4 4 40.0 4 4 50.0 6 6 6 30.0 3 3 3

Hort: flowers & foilage (cut) 7.5 3 5.0 5

Hort: plants (live) 5.0 4

Live animals (other) 5.0 1 1

continued—
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Table A2.2 

Sensitive tariff lines under the ASEAN-Australia/New Zealand and ASEAN-China FTAs—continued

ASEAN country tariff lines excluded from cuts or partially liberalized under the ASEAN-Australia/New Zealand FTA

Indonesia Malaysia Philippines Thailand Vietnam

IBAT description Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Live bovine 2.5 1

Live sheep & goats 5.0 2 2

Meat (frsh or frzn): edible offal 2.5 1 4.0 1

Meat (frsh or frzn): goat 2.5 1 5.0 2 2

Meat (frsh or frzn): sheep 3.8 4 2

Meat (frsh): pork 28.0 6 6

Meat (frsh): poultry 5.0 2 2 12.5 6 3

Meat (frzn): beef 5.0 1 1

Meat (frzn): pork 3.8 1 28.0 10 10

Meat (frzn): poultry 12.5 1 23.7 13 13 17.9 7 6

Meat (prep): beef 5.0 1

Meat (prep): nes 18.5 2 5.0 3

Meat (prep): pork 28.1 7 5.0 8

Meat (prep): poultry 32.0 3 5.0 4

Nuts & fruit (dried & frsh) nes 4.0 1 5.0 7 30.0 1 1 1

Oil seeds: copra 20.0 1 1 1

Oil seeds: other 10.0 1 1

Oil seeds: soybeans 10.0 1 1 20.0 2 2 2

Oil: coconut 20.0 4 4 4

Oil: palm 20.0 3 3 3

Oil: palm kernal 20.0 7 7 7

Oil: soybean 20.0 4 4 4

Oilcake: soybeans 20.0 1 1 1

Spices 27.0 6 6 6

Starches (edible nes) 5.0 1

Sweeteners: beet & cane 

sugar (raw) 24.8 3 3 53.8 4 4 4 65.0 2 2 2

Sweeteners: beet & cane 

sugar (refined) 36.8 4 4 32.2 14 14 14 65.0 4 4 4

Sweeteners: honey 4.0 1

Tea 30.0 8 8 8

Tobacco (unmanufactured) 5.0 5 5 5 60.0 12 12 12

Tobacco products 10.6 16 9 120.6 14 14 35.9 17 12

Veg (dried): onion, garlic, leeks 27.0 1 1 1

Veg (dried): other 27.0 1 1 1

Veg (frsh): cabbage 4.0 5 20.0 2

Veg (frsh): carrots & edible 

roots 2 32.0 1

Veg (frsh): garlic & leeks 5.02 27.0 2 2 2

Veg (frsh): lettuce 4.0 1 20.0 2

Veg (frsh): onions & shallots 12.5 1 5.0 2 43.5 4 4 4

Veg (frsh): other 4.0 1 16.0 1

Veg (frsh): potatoes 18.8 1 32.0 2 2 27.0 2 2 2

Veg (frsh): tomatoes 4.0 1

Totals 155 23 92 85 9 65 108 75 36 107 102 102 100 0 24

555 209 319

continued—
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Table A2.2 

Sensitive tariff lines under the ASEAN-Australia/New Zealand and ASEAN-China FTAs—continued

China and ASEAN tariff lines excluded from cuts or partially liberalized under the ASEAN-China FTA

Indonesia Malaysia Philippines Thailand Vietnam

IBAT description Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Ag products: misc 150.0 2 2

Beverages: beer 40.0 2 2

Beverages: brandy 150.0 4 4

Beverages: cider 138.0 5 5

Beverages: distilled spirits nes 121.8 17 17

Beverages: gin 150.0 2 2

Beverages: nonalcoholic 50.0 8 8

Beverages: rum 150.0 2 2

Beverages: whiskey 150.0 2 2

Beverages: wine 134.0 15 15

Coffee husks & skins 44.0 2 2 2

Coffee mixtures & extracts 40.0 3 3 3

Coffee: not roasted 30.0 4 4 4 5.0 2

Coffee: roasted 30.0 4 4 4 5.0 1

Crude vegetable material 1.0 2 2 2

Dairy: fluid milk & cream 35.0 12 12 12 40.0 3 3 3

Dairy: milk & cream, pwdr & 

cndnsd 5.0 2 2 2

Eggs 50.0 4 4 4 5.0 2

Feed: pet food 29.7 6 6 5.0 9

Fiber: animal hair, excl wool 5.0 1 1

Fiber: cotton (carded) 40.0 1 1 1

Fiber: cotton (not carded) 5.0 1 1

Fiber: silk 226.0 1 1 1

Fiber: wool 5.0 5 5

Food prep: composite mixtures 150.0 5 5 5.0 1

Fruit (dried & frsh): coconuts 50.0 2 2

Fruit (prep): composite mixtures 5.0 1

Fruit (prep): pineapples 5.0 2

Fruit juice: mixtures 5.0 3

Fruit juice: pineapple 5.0 2

Grain prod: breakfast cereal 50.0 1 1

Grain prod: flour (non-wheat) 9.0 1 1 16.7 3 3 1

Grain prod: flour (wheat) 5.0 2 50.0 1 1

Grain prod: meal 32.0 5 5

Grain prod: starch (corn) 5.0 1

Grain: corn 5.0 2 2 42.5 2 2 2 20.0 2 2 2 35.0 2 2 1

Grain: rice (milled) 160.0 6 6 6 40.0 4 4 45.0 12 12 12 50.0 6 6 27.5 4 4

Grain: rice (unmilled) 160.0 3 3 3 40.0 4 4 45.0 6 6 6 50.0 3 3 50.0 6 6

Grain: wheat 5.0 3 3

Live pigs 32.5 4 4 4

Live poultry 30.0 2 2 2 36.3 4 4 4

Meat (frsh): pork 35.0 10 10 10

Meat (frsh): poultry 40.0 2 2 2 39.0 10 10 10

continued—
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Table A2.2 

Sensitive tariff lines under the ASEAN-Australia/New Zealand and ASEAN-China FTAs—continued

China and ASEAN tariff lines excluded from cuts or partially liberalized under the ASEAN-China FTA

Indonesia Malaysia Philippines Thailand Vietnam

IBAT description Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Avg. 

tariff

No. of 

lines

TRQ 

lines

No. 

cut

Meat (frzn): pork 35.0 10 10 10

Meat (frzn): poultry 40.0 2 2 2 31.3 24 24 20

Meat (prep): pork 40.0 6 6 5.0 4

Meat (prep): poultry 40.0 3 0 3

Nuts & fruit (dried & frsh) nes 50.0 1 1

Nuts & fruit (prepared) nes 5.0 5 5.0 1

Oil seeds: copra 36.0 1 1 1

Oil seeds: soybeans 80.0 2 2 2

Oil: coconut 20.0 4 4 4

Oil: palm 20.0 3 3 3 8.8 4 4 4

Oil: palm kernal 20.0 7 7 7

Oil: rape 9.0 5 5 5

Oil: soybean 50.0 4 4 9.0 2 2 2

Oilcake: soybeans 5.0 1 1 1

Spices 5.0 4 27.0 6 6 6 5.0 2

Starches (edible nes) 5.0 1

Sweeteners: beet & cane

sugar (raw) 50.0 4 4 3 50.0 2 2 50.0 2 2 2

Sweeteners: beet & cane 

sugar (refined) 29.0 14 14 11 50.0 4 4 50.0 4 4 4

Tea 30.0 8 8 8

Tobacco (unmanufactured) 5.0 10 10 5.0 1 1 1 30.0 12 12 12 5.0 5

Tobacco products 46.8 14 1 34.2 6 2

Veg (dried & frsh): roots & 

tubers 40.0 4 4

Veg (dried): onion, garlic, leeks 50.0 1 1

Veg (frsh): beans & peas 5.0 2

Veg (frsh): cabbage 90.0 1 1 1 30.0 3 3

Veg (frsh): carrots & edible 

roots 21.7 3 2

Veg (frsh): cucumbers 5.0 1

Veg (frsh): garlic & leeks 22.5 4 2 50.0 2 2

Veg (frsh): lettuce 5.0 4

Veg (frsh): onions & shallots 40.0 4 4 50.0 4 4

Veg (frsh): other 5.0 5

Veg (frsh): potatoes 40.0 2 2 2 50.0 2 2

Veg (frzn or prep): other 18.8 8 6

Veg (prep): tomatoes 5.0 2

Totals 78 9 78 46 24 33 162 102 130 133 106 67 72 50 22

491 291 330

ASEAN = Association of Southeast Asian Nations. FTA = free trade agreement. nes = not elsewhere specified. TRQ = tariff-rate quota.

Source: USDA, Economic Research Service calculations using USDA internal databases.
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Table A2.3

Three U.S. pending trade agreements, summary of tariff line commitments1

Bound duty free Duty free in

first year

Duty free by 

last year

Partially 

liberalized2 Excluded Total tariff lines

No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct.

U.S.-Korea

U.S. 387 21 676 37 751 41 0 0 0 0 1,814 100

Korea 30 2 558 36 932 60 0 0 31 2 1551 100

U.S.-Colombia

U.S. 387 21 1231 68 149 8 0 0 47 3 1,814 100

Colombia 0 0 714 78 206 22 0 0 0 0 920 100

U.S.-Panama

U.S. 387 21 1228 68 152 8 2 0 47 3 1,816 100

Panama 270 19 691 49 459 32 0 0 2 0 1,422 100

1The table contains a count of simple tariff lines (not trade weighted) at the tariff line level (the HS8-digit level for Colombia, Panama, and the 

U.S. and the HS10-digit level for Korea).

2In the case of U.S. tariff treatment to Panama, this includes two subdivided tariff lines designated as receiving special designation.

Source: USDA, Economic Research Service.
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Table A2.4

Selected processed food, fish, and other U.S. agricultural exports to Korea

U.S. exports1 Tariff Phase-in Competitors

$ millions Percent Years

Processed fruit and vegetables 112

Frozen french fry potatoes 27 18 0 Canada

Prepared/preserved sweet corn 20 15 5 Thailand

Mixtures of nuts 11 45 0 China

Other 55

Snack foods 85

Prepared/preserved potato chips 13 20 5 China

Chocolate and chocolate confectionery, 

filled, less than 2 kg 9 8 5 EU

Confectionery and food preparations 

containing cocoa, not for retail sale 8 8 NA EU

Chocolate and chocolate confectionery, not 

filled, less than 25 kg 9 8 5 EU

Corn chips and similar snacks 5 8 NA China

Other 40

Fruit and vegetable juices 40

Grape juice 11 45 0 Chile, EU

Mixtures of fruit juices 7 50 10

Frozen orange juice 5 54 0 Brazil, Israel

Other 16

Coffee, roasted 18 29.5 5 Korea, EU, Japan, Switzerland

Fish products 293

Frozen Alaska pollock roe 86 10 NA Russia

Frozen Alaska pollock surimi (fish paste) 80 10 NA ASEAN, China

Frozen cod, except fillets, livers, and roe 22 10 NA Russia

Firsh meal fit for human consumption 12 20 NA

Other 94

Beverages 41

Beverage waters 8 8 0 EU

Grape wines 11 15 0 EU, Chile, Australia

Other 22

Tobacco 21

Unmanufactured tobacco 21 20 10 Brazil, EU, India, Malawi, China

NA= not available. ASEAN = Association of Southeast Asian Nations. 

1Average for 2007-09.

Source: USDA, Economic Research Service calculations using Tariff Schedules of Korea and USDA’s BICO (bulk, intermediate, and consumer) 

database.