Organic Trade Association welcomes U.S.-Korea agreement

Washington / DC. (ota) The Organic Trade Association (OTA) welcomed a new organic equivalency arrangement between the United States and South Korea, saying it reopens a critically important Asian market for U.S. organic processed food products, and will create jobs and opportunity for the American organic food and farming sector.

«We extend our thanks and congratulations to the officials at the U.S. Department of Agriculture and the Office of the U.S. Trade Representative for their success after a year of rigorous negotiations», said Laura Batcha, CEO and Executive Director of OTA. «OTA and the U.S. organic industry have worked diligently to help make this happen. This new pact streamlines the trade of organic processed food products between the two countries while still upholding the highest standards of organic oversight. It is a win for the organic sectors and for the consumers of both nations».

Estimates are that under the new streamlined trading system made possible by this arrangement, American exports of organic processed foods and beverages to South Korea, which were valued at around 35 million USD in 2013, will more than double over the next five years.

This is the second organic equivalency partnership formed with a major Asian trading partner within the past year. Last September, the United States and Japan agreed to a similar understanding regarding the bilateral trade of organic products. Batcha said the progress in Asia builds on the landmark equivalency arrangements with Canada in 2009 and the European Union in 2012, the two biggest trading partners for U.S. organic agriculture.

The U.S.-South Korea equivalency arrangement was formalized on June 30 in separate signings in Seoul and Washington and went into effect July 01. Under the pact, South Korea recognizes USDA´s National Organic Program (NOP) as equivalent to South Korea´s organic oversight program. The understanding, which covers organic condiments, cereal, baby food, frozen meals, milk, alcoholic beverages and other processed products, allows processed organic products certified in South Korea or in the United States to be sold as organic in either country.

U.S. organic exports to South Korea have been on the rise in recent years, as the demand for organic products by South Korea´s 50-million plus population, which enjoys the highest per-capita income in Asia, has flourished. However, the lucrative South Korean organic market was effectively closed to the U.S. at the end of last year due to a change in South Korea´s organic certification requirements.

The organic food market in South Korea grew by an average rate of 50 percent from 2006 to 2011, and is expected to expand to six billion USD by 2020. In 2011, organic food represented ten percent of the total agricultural products market in the country. South Koreans are eating more organic packaged foods, organic beverages (especially organic green tea), as well as organic milk and yoghurt, along with organic baby food, sweets and bread.

South Korea is one of the fastest-growing developed countries in the world with a booming economy. The South Korean economy is heavily engaged in international trade, and South Korea ranks as one of the world´s top importing nations. South Korea is the fifth-largest foreign market for U.S. agricultural products. The organic equivalency pact is in addition to the U.S.-South Korea Free Trade Agreement signed in March 2012.

The new arrangement with South Korea comes as demand for organic products in the U.S. is also booming, Organic sales in the United States totalled 35,1 billion USD in 2013, a new record and up twelve percent from a year ago.

Batcha said that while the robust organic market in the United States has created jobs in the organic sector at four times the national rate, exports are critical for farmers and processors and will spark additional growth.

Details: For more information on the details of this arrangement, visit OTA´s website and USDA´s NOP website.

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