Korea-US FTA would put pressure on Aussie beef
North Queensland Register, Australia
Korea-US FTA would put pressure on Aussie beef
By Vernon Graham
14 March 2008
The expected quick resolution of the dispute now holding up a free trade deal between South Korea and the US will put Australian beef sales to our third largest export market under pressure.
Glen Fiest, Meat and Livestock Australia’s regional manager in South Korea, told last week’s Outlook conference in Canberra that South Korea’s new pro-trade president, Lee Myung-bak, was likely to remove the current restrictions on US beef which had been delaying ratification of the American FTA.
Australia would then have three years to press for a similar deal or face increasingly lopsided competition from our major rival as a 40 per cent tariff on US beef was phased out over 15 years.
Mr Fiest said many other countries were also queuing up for a FTA with South Korea which may hamper Australia’s need to strike a speedy deal. Australia and South Korea have done a feasibility study on a FTA but no decision has been made on starting formal negotiations for a bilateral deal.
South Korea banned US beef in December, 2003, following an outbreak of mad cow disease (BSE) on a farm in Washington State. Seoul partially lifted the ban in early 2006, accepting only boneless beef from cattle younger than 30 months but has temporarily suspended the trade several times since then after bone material was found in shipments.
President Lee has indicated South Korea may lift the ban on bone-in US beef but keep the trade restricted to animals under 30 months.
ABARE, Australia’s national commodity forecaster, is tipping that Australia’s export to South Korea will slide by 19pc to 110,000 tonnes in 2008-09 and keep falling to 90,000t by 2012-13 as the US regains market share.
However, stabilising the South Korean trade in the longer term may help all exporters, particularly if Australia scores a FTA agreement with Seoul.
Mr Fiest said South Koreans loved beef, especially Australian beef, although consumers were concerned more with price rather than food safety in contrast to their Japanese neighbours.
"The US is finding it tough going in Japan (because of ongoing fears about BSE). South Koreans love beef and they will eat US beef," he said.
"The best gift you can give a South Korean is a box of beef," he said.
He said looking to the longer term, the likes of China, Indonesia and Russian had the potential to emerge as major beef markets.
