U.S.-South Korea trade deal holds potential

Cattlemen: Full U.S. beef access must be addressed

The United States is launching negotiations for a free trade agreement (FTA) with South Korea, historically one of the largest export markets for U.S. beef. In 2003 alone, this export market for U.S. cattle producers was valued at over $815 million--our third largest export market.

"Right now, U.S. cattle producers are cautious while still being subjected to South Korea's long-standing, unscientific ban on our most popular beef products for the past two years," says National Cattlemen's Beef Association President and Texas cattle producer Jim McAdams. "We support the launch of this free trade agreement with South Korea, and expect to see the full re-opening of this market to all U.S. beef, significant reductions of Korea's tariffs, and resolution of important sanitary and phytosanitary (SPS) issues."

South Korea closed its market to U.S. beef on Dec. 24, 2003 after the U.S. discovery of a single imported cow with Bovine Spongiform Encephalopathy (BSE). On Jan. 13, 2006, negotiators reached an initial import protocol stating South Korea will accept U.S. boneless beef from cattle less than 30 months of age, but its ban on U.S. bone-in beef and variety meats remains--which historically accounted for roughly half of the total value of U.S. beef exports to South Korea.

"NCBA members have been leaders in the promotion of reliable, free and fair trade across the globe," says Michelle Reinke, NCBA director of legislative affairs. "But we are disappointed that once again, at a time when breaking down international trade barriers is the way forward for producer growth and increased profit opportunities, an arbitrary restriction on U.S. beef exports remains."

"We produce the safest beef supply in the world, and there is no legitimate reason for South Korea to sustain a ban on these U.S. beef products," says McAdams. "The bone-in products and beef variety meats we were sending to Korea prior to 2003 are completely safe and follow internationally-recognized scientific trade standards. We are disappointed this market is only partially reopened."

South Korea was the fifth largest export market for U.S. agricultural products and the seventh largest overall for the United States in 2004. Historically, South Korea imports about 60 to 70 percent of its agricultural needs. In 2004, the total value of South Korean imports of agricultural products from all nations was $14.7 billion, and is estimated at $15.5 billion for 2005.

"The trade agreement must assure all tariffs on U.S. beef be reduced to zero," says Reinke. "Right now, along with the partial ban on U.S. beef, South Korea imposes some of the highest tariffs on beef imports in the world, bound at 40 percent."

"Cattle producers support the elimination of tariffs globally and advocate only science-based trade agreements," says McAdams. "We expect a U.S.--South Korea FTA to fully reopen the Korean market to all beef products, follow important market liberalization precedents set in other recent FTAs--such as Chile and CAFTA-DR--that will assure real market access for U.S. beef and beef products, and provide improved mechanisms to deal with SPS issues. All these must be resolved by the time this agreement is sent to Congress for final approval."

"South Korea is a very important export market for U.S. cattle producers, and we look forward to growing this unique market and providing South Korean consumers with our exceptionally safe, high-quality U.S. beef products," says McAdams.

Date: 2/23/06