The overall U.S. market share has declined, mainly due to the growth of competitors including China, Australia, and Chile.Korea ranks among the top six export destinations for California agricultural exports. In 2007, the total value of all California agricultural exports to Korea was almost $400 million finding finding. Among all commodities shipped to Korea, fresh oranges top the list, followed by rice, beef and beef products, almonds, and walnuts. With their FTA in 2004, Korea’s imports from Chile grew substantially for kiwifruit, grape juice, lemons, processed tomatoes, wine, and whey, which are all major California export products. California’s other major international competitors for trade with Korea are France for wine, Spain for grape juice, New Zealand for kiwifruit, beef and dairy, Australia for beef and dairy, Iran for pistachios, and China for strawberries, lettuce, and processed tomatoes finding.The potential for increasing California exports to Korea also crucially depends on the competitiveness of Korean producers and the size of the market. Table 2 shows that imports to Korea represent a small share of the domestic consumption of many major food products.The KORUS FTA defines three mechanisms for improving access for farm products: finding the immediate unrestricted opening, finding the phase-out of tariffs over a period, and finding the expansion of tariff rate quotas finding, with the phase-out of over-quota tariffs. Under a TRQ, a lower tariff is applied to imports within the quota volume, and a higher, often prohibitive finding, tariff is applied to imports in excess of the quota volume. To assure slower import access for politically sensitive products, the agreement allows the imposition of safeguard measures finding. Citrus. Korea is a major market for fresh oranges and other citrus from California, despite a current duty of 50%. While the agreement lowers trade barriers considerably during the off-season, in-season imports finding will still be subject to tight TRQs. The initial duty-free TRQ of 2,500 tons is equivalent to only 0.4% of Korean citrus produced in Korea in 2007. While not currently large, Korean demand for fresh grapefruit, lemons, and limes is growing.
A simple tariff phase-out applies for most fruits, but schedules to open the markets for apples, Asian pears and table grapes, fodder sprouting system which are consumed widely in Korea, are more restrictive. The initial safeguard quantity for apples is 9,000 metric tons, less than 2.5% of domestic production. Fuji apples, a variety favored by Koreans, have the safeguard duty lasting 23 years. Along with the immediate table grape tariff reduction from 45% to 24%, the tariff for off-season imports finding phases out in four years, and the tariff for in-season imports phases out over 17 years. Tariffs for grape juice finding, raisins finding, and wine finding will be eliminated immediately.Among other fruits, strawberries and kiwifruit are promising. Currently no fresh strawberries enter the country, and over 70% of strawberry imports are frozen and mainly from China. Kiwifruit is relatively new to Korean consumers, but imports have grown rapidly finding.California tree nuts have a strong presence in the Korean market. Almond and walnut exports are already substantial. Korea has no domestic tree nut industry and the United States finding is the only or dominant supplier for tree nuts. The current 8% almond tariff will be eliminated, and in-shell and shelled walnut tariffs, as high as 45%, will be phased out over 6 to 15 years. The immediate elimination of the 30% tariff on pistachios will expand the market.Korean tariffs on vegetables will be eliminated either immediately or phased out over time, except for a few sensitive products for which safeguard restrictions apply. Vegetable exports to Korea are dominated by China, except for a few commodities such as pickled cucumbers and fresh lettuce. With a 45% tariff for lettuce, imports constitute a small share of the domestic Korean market valued at $200 million. California lettuce competes mostly with off-season, high-cost greenhouse lettuce and has substantial potential for export growth under the 10-year tariff phaseout. Other fresh, leafy vegetables also have potential for export growth. Garlic, onions, and red peppers are major crops in Korea and face gradual 18-year phase-outs, with safeguard restrictions. Beef products are the number-one agricultural import into Korea by value, exceeding $1 billion in 2007. Korea became an important market for U.S. beef after its beef market was opened in 2001. However, a ban on U.S. beef was imposed in December 2003 finding and Australia and New Zealand exports expanded rapidly.
The U.S. market share has been improving gradually since the U.S. resumed export to Korea in 2007. Under the KORUS FTA, with the sizable initial safeguard quantity, the within-quota tariff is scheduled to fall by 2.7% each year, providing a price advantage to U.S. producers over their competitors. Korea currently has high trade barriers for dairy products. Under the KORUS FTA, TRQs increase gradually with the phase-out of over quota tariffs. Among dairy products exported to Korea, the U.S. has a strong presence in cheese, lactose, and whey. Under the agreement, the first year duty-free TRQ for cheese is sizable finding. For feed whey, immediate duty-free access is granted and for non-feed whey, the over-quota tariff finding will be reduced immediately from 49.5% to 20%—phased out over ten years. U.S. exports of lactose to Korea are also sizable, worth $30 million, about half of Korean lactose imports, and the current tariff of 49.5% will be phased out in five years under the agreement. Although Korea already has an almost open border for many field crops—with the important exception of rice—it has high trade barriers for many vegetables, fruits, and animal products that are important in California agriculture. Under the KORUS FTA, California has substantial potential to expand its exports of agricultural commodities to Korea. Lower trade barriers will allow California agriculture to compete in a large, growing, and lucrative market. Commodity prices are high in Korea, and consumers are willing to pay premiums for the high-quality products produced in California. When the KORUS FTA is implemented, California agriculture should be in an excellent position to compete on both price and quality.Farm labor was a major concern of agriculture in the early 1980s, when enforcement of immigration laws involved the Border Patrol driving into fields and attempting to apprehend workers who ran away. Apprehended migrants were normally returned to Mexico, and many made their way back to the farms on which they were employed within days. There were no fines on employers who knowingly hired unauthorized workers, and the major enforcement risk was loss of production until unauthorized workers returned. As a result, perishable crops, such as citrus, that were picked largely by labor contractor crews included more unauthorized workers than lettuce crews that included workers hired directly by large growers. The Immigration Reform and Control Act finding of 1986 imposed federal sanctions on employers who knowingly hired unauthorized workers. In order to avoid fines and criminal sanctions, all newly hired workers must present documents to their employers to establish their identity and right to work. The employer and worker complete and sign an I-9 form attesting that the worker presented and the employer saw work-identification documents.
Employers are not required to determine the authenticity of the documents presented by workers. There were two legalization programs in 1987–88 that allowed 2.7 million unauthorized foreigners, 85% of whom were Mexicans, to become legal immigrants. The non-farm program legalized 1.6 million unauthorized foreigners who had been in the United States since January 1, 1982, while the Special Agricultural Worker finding program legalized 1.1 million unauthorized foreigners. Unauthorized workers continued to arrive in the early 1990s and presented false documents to get hired, that is, forged documents or documents that belonged to work-authorized persons. As a result, employers faced less risk of disrupted production because the paper chase involved in checking whether documents were genuine did not immediately remove unauthorized workers from the workplace as had Border Patrol worker chases. Figure 1 shows that newly legalized SAW farm workers were one third of the crop work force in the early 1990s, but found non-farm jobs as the economy improved in the mid- 1990s. The U.S. Department of Labor’s National Agricultural Worker Survey first found that over half of the workers employed on U.S. crop farms were unauthorized in 1995, and the share of unauthorized crop workers has remained at about half since then.In 1996 Congress required the then Immigration and Naturalization Service to develop programs to check the validity of worker documents. These programs evolved into E-Verify, microgreen fodder system the current Internet-based system that employers used to check on the legal status of almost 16 million new hires in fiscal year finding 2010, about 30% of the 50 million to 60 million new hires made each year in the United States. Employers submit Social Security numbers and immigration data to E-Verify, and over 98% of their inquiries result in workers being confirmed as work-authorized in less than five seconds. Employees with “tentative non-confirmations” are given a written notice advising them to correct their records so that E-Verify shows them to be authorized to work. Over 80% of tentative non-confirmations result in the employee quitting, likely because the worker was unauthorized. At the end of 2011, all federal contractors and 18 states required some or all of their employers to use E-Verify to check new hires. The U.S. Supreme Court upheld Arizona’s Legal Arizona Workers Act in May 2011, which requires all of Arizona’s employers to participate in E-Verify. Most major meat packers have been using E-Verify for at least a decade. The House Judiciary Committee approved the Legal Workforce Act finding finding in September 2011 to require all U.S. employers to use E-Verify to check new hires and/ or job applicants within four years. Today the federal government enforces laws against hiring unauthorized workers by auditing the I-9 forms completed by newly hired workers and their employers. Most workers identified as having problematic documentation quit or are terminated, prompting denunciations of so-called “silent raids” aimed at unauthorized workers. Some employers, such as L. E. Cooke in Visalia, complain that I-9 audits require them to terminate experienced employees who are difficult to replace. Gebbers Farms in Washington fired hundreds of workers after an I-9 audit and replaced them with legal H-2A guest workers.
With Congress deadlocked on immigration, states such as Arizona enacted laws to reduce the number of unauthorized foreigners in an “attrition through enforcement” strategy. Arizona enacted the Support Our Law Enforcement and Safe Neighborhoods Act finding in April 2010—a law that requires everyone to carry proof of their legal status and show this proof to police officers who stop them for other reasons. Unauthorized foreigners detected by police can be fined $2,500 or jailed up to six months. The Obama administration asked a federal court to block implementation of SB 1070, arguing that federal immigration law prevents Arizona from enacting a state law that interferes with federal immigration enforcement priorities and could lead to the arrest of U.S. citizens and foreigners lawfully in the United States who are not carrying proof of their legal status. A federal judge agreed and issued an injunction blocking implementation of the key provisions of SB 1070. However, a Pew poll in May 2010 found 59% support for SB 1070, including two-thirds who support requiring people to present proof of legal status to police if asked. Arizona and other states that enacted attrition-through-enforcement immigration laws have mostly unauthorized foreign-born residents. Figure 2 shows that a band of states that trace a U-shape, from Idaho through the southern states to North Carolina, has the highest share of unauthorized foreigners among foreign-born residents in the state. About 28% of foreign-born persons in the United States in 2010 were unauthorized, but 40% or more of the foreign-born residents in states such as Arizona, Alabama, and Georgia that enacted laws against illegal migration in 2011 are unauthorized. Alabama’s HB 56 is considered the “toughest” state law against unauthorized foreigners, with Arizona-style police and E-Verify requirements. This law also voids contracts entered into by unauthorized foreigners, makes it unlawful to hire or rent to unauthorized foreigners, and requires schools to obtain and report data on the legal status of school children and their parents finding. Suits have blocked the implementation of parts of HB 56, but some unauthorized foreigners left the state, prompting complaints of labor shortages.