WASHINGTON — South Korea agreed April 18 to lift its ban on U.S. beef, an action that should allow the U.S.-Republic of Korea Free Trade Agreement to move forward.
The beef ban, implemented in December 2003 over concerns about so-called mad cow disease, has been a major source of friction in the two allies’ trade relationship and has been the main sticking point of the South Korea Free Trade Agreement, on which the Bush administration completed negotiations in March 2007.
Before the Korean market was closed to U.S. beef and beef products, following the detection of a case of BSE in the state of Washington, Korea was the third largest export market for U.S. beef and beef products, with annual sales more than $815 million.
South Korea began resuming imports of boneless U.S. beef last April, then re-imposed the complete ban after bones were found in several shipments. South Korea has cited disease fears as the main reason for the restriction. Media campaigns sponsored by South Korean beef producers have implied for years that U.S. beef is dangerous.
In May 2007, the World Organization for Animal Health (OIE) formally classified the United States as a controlled risk country for BSE. This status confirmed that U.S. BSE regulatory controls are effective and that U.S. beef and beef products of all ages can be safely traded. The announcement helped pave the way for last week’s decision.
Initially, the protocol will allow for the shipment of all U.S. beef products (boneless and bone-in beef, as well as variety meats) from animals under 30 months of age. Korea has agreed that this is a first step toward accepting all U.S. beef products from animals of all ages as directed by the World Organization for Animal Health guidelines.
The National Cattlemen’s Beef Association attributed much of the work to the Bush administration.
Gregg Doud, the association’s chief economist, said the U.S. beef industry “owes a huge debt of gratitude to President Bush and his administration, as well as our trade negotiators and members of Congress for this historic undertaking.”
Now, attention turns to Congress’ consideration of the United States-Korea Free Trade Agreement (KORUS FTA).
According to U.S. Ag Secretary Ed Schafer, once the free trade agreement is implemented, and the current 40 percent tariffs on U.S. beef are fully lifted, the agreement is expected to generate tariff savings of approximately $500 million a year for U.S beef exporters.
The International Trade Commission estimates that U.S. beef exports to South Korea could increase by $600 million to $1.8 billion.
“For U.S. beef trade, the Korean FTA could be could be the biggest and most important bilateral trade agreement in history,” said National Cattlemen’s Beef Association’s Doud.
The South Korean trade agreement will also be a boost for U.S. pork producers.
According to Iowa State University economist Dermot Hayes, when the agreement is fully implemented, total U.S. pork exports to the Asian nation will rise to nearly 600,000 metric tons.
That’s about twice as much as the amount currently shipped to Japan, the No. 1 export market for U.S. pork.
Hayes also estimates that the agreement will increase U.S. live hog prices by $10.
Under the terms of the South Korea pact, tariffs on all frozen and processed pork products will be eliminated by 2014. Fresh chilled pork will be duty free 10 years after implementation. U.S. pork products currently face tariffs as high as 25 percent.
Additionally, South Korea has agreed to accept all pork and pork products from USDA-approved facilities.
U.S. beef is expected to be on store shelves in South Korea within one or two months.