A recent report from the United States Trade Representative (USTR) has called into question South Korea's compliance with free trade agreement obligations, criticizing a market environment that allegedly promotes favoritism for local companies while placing additional costs and challenges on exporters.

The USTR has emphasized that since the United States-Korea Free Trade Agreement (KORUS) came into effect in 2012, U.S. agricultural exports to the country have fallen by 1.1%.

"In July 2017, at the direction of the President, USTR initiated a process to amend and modify the Agreement," the entity said in the report.

One of the key issues highlighted in the South Korean section of last week's report related to market access issues for fruit.

"The United States has a number of market access requests pending with Korea’s Ministry of Agriculture, Food and Rural Affairs’ (MAFRA) Animal and Plant Quarantine Agency (“QIA”)," the USTR said.

These requests include blueberries from states beyond Oregon, improvement in the cherry export program, and access for apples and pears, both of which are currently banned.

"The two governments discussed these issues at the 2017 APHIS plant bilateral meetings and at the USTR-led KORUS Sanitary and Phytosanitary Committee meeting held in November 2017.

"The United States continues to press Korea to allow imports of these fruits from the United States."

Unlike agriculture as a whole, the fruit industry has seen a remarkable jump in exports to South Korea since 2012, rising 32% to reach US$490 million last year.

One of the big drivers of that growth has been the stonefruit category with a 113% rise in exports since 2012 to hit US$194 million in 2017. Cherries accounted for around three quarters of that amount, with table grapes making up most of the balance.

Despite this growth in the deciduous fruit category, citrus remains the leading fresh fruit commodity shipped from the United States to South Korea with a value of US$261 million registered last year. However, growth since 2012 has been under 5%.

The USTR also drew attention to the resolution of issues surrounding table-stock potato exports from the U.S. Pacific Northwest to South Korea; a trade that was put on hold in 2012 due to "zebra chip" concerns.

"However, in September 2017, the two countries reached a final agreement to resume exports from the Pacific Northwest in the 2018 shipping season," it said.

"Potatoes from several other U.S. States still do not have market access due to Korea’s requirements
related to potato spindle tuber viroid (PSTVd), a disease that is not present in commercial U.S. potato
production areas.

"The United States continues to press Korea on the PSTVd issue."

In its report, the USTR also urged Indonesia to comply with the World Trade Organization (WTO) Dispute Settlement Body's findings and recommendations around fruit import licensing regimes that had a "significant trade restrictive effect" on imports.

"For the first time, apple imports will be banned August 2018 through September of 2018. There are also seasonal bans on oranges and lemons," the USTR added.

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