Research Reports
Korea-EU FTA Effects on Korean Agriculture and Export Promotion
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AuthorChoi, Seikyun
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Publication Date2009.12.30
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Original
After 2 years of negotiations, the Korea-EU Free Trade Agreement(FTA) has made a conclusion. This study focused on the effects of Korea-EU FTA on the Korean agricultural sector. This study tries to reflect final results of the negotiation. Korea exports about $50 million of agricultural products including processed food to the EU. On the other hand, Korea imports about $2 billion of agricultural products from the EU. Therefor potential loss from Korea-EU FTA in the Korean agricultural sector can be foreseeable.
Sensitive products for Korea-EU FTA include meat, except beef, and dairy in the livestock sector, tomatoes, grapes and kiwifruits in the horticultural sector. Impact analysis focused on the livestock sector. Increased imports of EU agricultural products are estimated to reduce Korean agricultural output by 306 billion won in the 15th year of implementation. It is far below the case of Korea-US FTA effects on Korean agriculture. Pork industry would be the biggest looser from the Korea-EU FTA and the value of production is estimated to be reduced by 55.6 billion won after 5 years of implementation and it would be increased to 121.4 billion won by the final year of implementation. Dairy and chicken industries output is estimated to be reduced by 80.5 billion won and 33.1 billion won respectively. For the horticultural sector, production of kiwifruits and grapes is projected to be reduced by 7 billion won and 3.2 billion won respectively. Tomatoes industry can be affected negatively from the Korea-EU negotiation by 5.4 billion won reduction of production.
Korea is evaluated to maintain and strengthen competitive edge against EU in some agricultural products such as fruits, tobacco leaves and drinking beverage. However, export promotion effects of the Korea-EU FTA on the Korean agricultural sector are expected to be restrictive. Major Korean commodities exported to the EU can increase exports because of the negotiation. Fifteen major export items exporting to the EU account for 78 percent of total export are estimated to increase export by $50 million from the basis of maximum exports. Export promotion effects evaluated from the basis of recent export performance data expected to be by $7 million.
Researchers: Choi, Sei-Kyun
Research period: 2008. 9. - 2009. 5.
E-mail address: skchoi@krei.re.kr
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