- Australian beef exporters face being priced out of the Korean export market.
Weekly Times | February 29, 2012
Korean deal hits beef exporters
AUSTRALIAN beef exporters have been caught in the fallout from a US-Korea Free Trade Agreement, which will start next month.
The Korean Government has effectively put any discussions on an Australian agreement on hold because, industry sources indicate, the US agreement has created so much angst in Korea.
But US beef will have a competitive tariff advantage for at least a year, and possibly longer with the stalling of Australian talks.
All countries exporting beef to Korea had a 40 per cent tariff.
Last week, the Korean Trade Ministry confirmed the Korea-US FTA would come into place from March 15.
It will kick off with a 2.67 per cent tariff reduction this year, winding down to zero over the next 15 years.
Cattle Council of Australia president Andrew Ogilvie said there was little the industry could do.
"We’ve effectively been told by Korea, ’Watch this space and we’ll get back to you’," he said.
"We have regular dialogue with the Minister for Trade and the department knows our position. It’s not about putting pressure on our government - they are doing their best - but the Korean Government will not even talk at the moment."
Mr Ogilvie said the concern for Australia’s beef industry was the US would now have a double advantage selling their beef to Korea.
"Not only will they have a tariff reduction advantage over us for at least a year, and maybe longer, but their currency weakness also helps them competitively," he said.
But Australian Meat Industry Council national processing director Steve Martyn said negotiating FTAs was a "big, complex process".
He said the US-Korea FTA negotiations had taken more than two years to implement even after the terms had been agreed to, after years of negotiation.
"I think Australian talks have almost caught up and have gone well to this point," Mr Martyn said.
"We are certainly watching the situation closely but also understand the Koreans will want to bed down the US agreement before they start again with Australia."
Last year, Australia exported 146,347 tonnes of beef to Korea, a jump of 18 per cent.
Meat and Livestock Australia had already factored in a 15 per cent drop in beef exports to Korea this year, back to 125,000 tonnes.
This estimate was based on a low US currency, and the introduction of the US-Korea FTA.