S.Korea farmers may get off bit lighter in U.S. deal

By Kang Shinhye

SEOUL (Reuters) - The free trade pact between South Korea and the United States may hit Korean farmers less than expected as South Korea won its battle to exclude sensitive items, industry experts said.

The two economic powers agreed the biggest U.S. trade pact for 15 years on Monday which scraps tariffs on a huge range of products but excludes rice.

Seoul also successfully defended itself against Washington's demand it immediately remove all import tariffs on U.S. beef.

Instead, the 40 percent tariff on U.S. beef will be phased out over 15 years, longer than the U.S. had proposed. Tariffs on pork will be eliminated over 10 years and tariffs on oranges over seven years.

"The free trade pact will definitely hurt local farmers but at least eliminating tariffs step by step for a long period would be good for South Korean farm industry," said Suh Jin-kyo, research fellow at Korea Institute for International Economic Policy (KIEP).

"Production losses in agriculture would be less than 1 trillion won (540 million pounds)."

Last year, the Korea Rural Economic Institute had forecast the free trade agreement would cause South Korean agricultural output to fall by 1-2 trillion won.

The state-run institute had also expected the free trade pact would result in beef production losses of around 220 billion won a year if the 40 percent import duties on beef were scrapped in 5 years.