Tariff elimination could mean big boost for local farmersPosted: Updated:
YAKIMA, Wash.-- A big day for Washington's agriculture industry and the Yakima Valley. A free trade agreement with South Korea went into effect Thursday.
South Korea is one of three countries to sign new free trade agreements with the U.S.
The announcement means that several tariffs, or import taxes, will be eliminated in South Korea. Taxes on things like cherries, wine, and beef. Big business in Washington state.
"Korea is currently the fifth largest export market for the cherry industry here, in Washington state," said Mark Powers with the Northwest Horticultural Council.
A 24% tax on cherries in South Korea is no more. The free trade agreement that went into effect Thursday also gets rid of a 15% tax on wine, and several other import taxes on U.S. products.
But it's cherries that has experts in our area most excited.
"That 24% tax is eliminated. Not all of that will go to consumers or back to our industry but it will be divvied up and the net result should be an increase in sales," said Powers.
An increase that Northwest Cherry Growers think could boost sales up to $20 million more per year in Korea.
Senator Maria Cantwell (D-WA), who's been pushing for the free trade agreement, says this will mean great things for local farmers, packers, and shippers.
"Washington products getting access to a market without tariffs mean there's just a whole new market group of consumers that are going to have demand for those products," said Sen. Cantwell.
Powers says now with the tax is gone, 50 million South Koreans will hopefully buy more cherries, meaning our growers here, in the Yakima Valley should sell even more.
"Over the past 4 or 5 years, each year our sales have grown to Korea even with the 24% tariff," said Powers.
There are several other products that will see the elimination of a tariff.
Another major one is a 40% tax on beef that will phase out over the next 15 years. But the American Farm Bureau says that Washington state will see a $7 million increase per year.