South Korea Opens Duty-Free Quota for Imported Beef

South Korea is currently the leading value market for U.S. beef exports, with shipments on pace to possibly reach $3 billion in 2022. But rising food prices are a concern in Korea, and the government is taking steps to ease the burden on consumers. As part of this effort, Korea recently opened a 100,000 metric ton (mt) duty-free quota on imported beef, open to all eligible suppliers.

U.S. Meat Export Federation (USMEF) Vice President for Economic Analysis Erin Borror explains that the quota includes 25,000 mt of chilled beef and 75,000 mt of frozen beef. The United States is the largest supplier in both categories but captures an especially strong share (66%) of Korea’s chilled beef market.

Under the Korea-U.S. Free Trade Agreement (KORUS), U.S. beef has a tariff rate advantage over major competitors in Korea. All major beef suppliers will eventually reach zero duty, but the U.S. has a head start because KORUS entered into force earlier than other FTAs. For example, U.S. beef is currently tariffed at 10.7%, Australian beef at 16% and New Zealand and Canadian beef at 18.6%. Suppliers with no FTA, such as Mexico and Uruguay, are subject to a 40% tariff. Borror notes that while the duty-free quota will temporarily eliminate U.S. beef’s tariff advantage, the U.S. industry will benefit significantly because of its position as Korea’s largest supplier. She estimates that under the quota, the cost savings on imports of U.S. beef equates to about 70 cents per pound for chilled beef and 43 cents per pound for frozen.

Through June, U.S. beef exports to Korea are on a record pace at $1.52 billion, while global exports reached $6.19 billion. A detailed summary of January-June exports of U.S. beef, pork and lamb is available from the USMEF website.

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The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations. USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law. USMEF is an equal opportunity employer and provider.