Implications of the U.S.-Korea Free Trade Agreement for Agriculture and other Sectors of the Economy

This paper examines the effects of the U.S.-Korea free trade agreement (KORUS FTA) on various sectors of the economy in the two countries using a general equilibrium model. Additional analysis focuses on the agricultural sector. Our analysis indicates that the increase in U.S.-Korea bilateral trade volume in recent years has been through intra-industry trade of high-technology products. Under the KORUS FTA, the bilateral trade volume would increase for virtually all the sectors, and GDP and social welfare would improve for both countries. However, producers of textile products in the United States and producers of agricultural and food products in South Korea would suffer from the FTA. This agreement could benefit U.S. agriculture, but the benefits could be greater in the long run as duties on beef and other meat products are eliminated.

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Agribusiness & Applied Economics Report No. 619

 Record created 2017-04-01, last modified 2020-10-28

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