FTA with EU to hurt S Korea’s alcohol, meat, dairy sectors: report
2007/05/07 Yonhap
FTA with EU to hurt S. Korea’s alcohol, meat, dairy sectors: report
SEOUL, May 7 (Yonhap) — A free trade pact with the European Union (EU) is expected to hurt South Korea’s alcoholic beverage, meat and dairy sectors, a report said Monday.
South Korea, fresh from a free trade agreement with the United States, began talks with the EU on Monday for a similar deal. It hopes to wrap up the negotiations within a year.
"A free trade deal with the EU could damage the domestic agricultural sector by sparking a surge in imports of wine, whiskey, pork and dairy products," said the report by the Nonghyup Management Institute, a semi-official research institute.
According to the report, the EU has a comparative advantage in such products as whiskey, wine, poultry, pork and dairy products, while fresh fruits, vegetables and grains are unlikely to pose threats to South Korean growers due to quarantine restrictions, geography and costs.
"Whiskey and wine would have the greatest impact," the report said. "Because Seoul levies tariffs of 20-30 percent on alcoholic beverages, imports would rise sharply if they were scrapped," the report said.
Imports of poultry and pork could also increase sharply, it added.
In 2005, South Korea imported 53,000 tons of pork from Europe, accounting for 70 percent of all imports that year. Imports of poultry shot up after Seoul imposed a ban on meat from the United States and Thailand after an outbreak of bird flu disease in those countries in 2003. EU pork and poultry are about 60 percent cheaper than local products.
Because cases of mad cow disease reported in Europe, South Korea does not import beef from the 27-member economic bloc.
The EU is also expected to increase sales of dairy products, according to the report. Powdered milk and cheese already account for 30 percent and 10 percent of the local market, respectively.
However, the report said, the EU seems to be more inclined to allow special clauses for so-called sensitive agricultural goods that could help reduce fallout of the proposed deal on its agriculture sector.
