South Korea | Free Trade Agreement Reveals Opportunities For Long Term U.S. R...

South Korea

Free Trade Agreement Reveals Opportunities For Long Term U.S. Red Meat Sales

Details have been released on the agreement reached during the U.S.-Korea Free Trade talks (KORUS) that concluded April 1. The KORUS full draft text provides a clear indication how U.S. beef, pork, and lamb exports will increase in competitiveness as tariff and non-tariff barriers are phased out.

The text remains a proposed version, as approval by respective legislatures in the United States and South Korea is required before implementation. In addition, the proposed text does not include provisions for labor rights, environmental safeguards and other issues that are part of a bipartisan agreement on trade reached between the Bush administration and Congress after the KORUS talks.

The KORUS agreement reduces tariffs on industrial and agriculture products and includes terms of other mutual commitments on competition policy, e-commerce, transparency, pharmaceuticals/medical devices, intellectual property rights, investment and services. The provisions on beef, pork, and lamb access will give U.S. exporters expanded access by removing restrictions as well as providing a competitive advantage over other suppliers.

For U.S. pork products, all import duties will be phased out by 2014 on frozen pork, variety meat, bacon, stomachs and processed meats and hams. Assuming implementation of the KORUS agreement by 2009, the phase down period for these items would be five years. For chilled U.S. pork products, currently assessed a 22.5 percent duty, a safeguard would see duties for volumes moving under and over the trigger levels gradually reduce to zero by 2019. An initial trigger level of 8,250 metric tons of chilled pork will be established in 2009. Duties on U.S. pork sausage would also be eliminated under a five-year phase-out of the current 18 percent duty. 

For U.S. beef, a phase-out of the 40 percent duty in equal annual stages over a 15-year period would start upon the implementation date of the agreement. Duties on beef variety meat will be reduced over the 15-year period, from 18 percent to zero. The 15-year phase-out period also applies to salted and dried beef products and prepared/preserved beef items. Duties on these products currently range from 22.5 percent to 72 percent, but will be reduced to zero over 15 years following implementation of the agreement.

Safeguards apply to both fresh/chilled and frozen boneless and bone-in cuts of beef. The beginning volume for the safeguard is significantly larger than the 213,000 metric tons (mt) of U.S. beef exported to South Korea in 2003. Upon implementation, the safeguard will be 270,000 mt and increase each year for 15 years while duties for both under and over trigger volumes are gradually reduced to zero. For example, during the 15th year, the safeguard would be 354,000 mt and the over-safeguard duty 24 percent while imports within the safeguard are duty-free. The 16th year marks the end of the safeguard and duty for all imports reduces to zero.   

For lamb, all duties will be phased out over a 10-year period, from 22.5 percent to zero following implementation of the agreement.

For more information on tariff phase-outs and safeguards, see the USMEF analysis for beef, pork and lamb.

In another development, South Korea's Deputy Minister of Agriculture announced Monday (May 28) that South Korea will likely complete its eight-step risk assessment process for expanded U.S. beef product access by September. Talks on expanding U.S. beef access related to the attainment of an OIE “controlled risk” level designation for BSE were interwoven with the free trade talks, but not a formal item of the KORUS discussions.

South Korea

Free Trade Agreement Reveals Opportunities For Long Term U.S. Red Meat Sales

Details have been released on the agreement reached during the U.S.-Korea Free Trade talks (KORUS) that concluded April 1. The KORUS full draft text provides a clear indication how U.S. beef, pork, and lamb exports will increase in competitiveness as tariff and non-tariff barriers are phased out.

The text remains a proposed version, as approval by respective legislatures in the United States and South Korea is required before implementation. In addition, the proposed text does not include provisions for labor rights, environmental safeguards and other issues that are part of a bipartisan agreement on trade reached between the Bush administration and Congress after the KORUS talks.

The KORUS agreement reduces tariffs on industrial and agriculture products and includes terms of other mutual commitments on competition policy, e-commerce, transparency, pharmaceuticals/medical devices, intellectual property rights, investment and services. The provisions on beef, pork, and lamb access will give U.S. exporters expanded access by removing restrictions as well as providing a competitive advantage over other suppliers.

For U.S. pork products, all import duties will be phased out by 2014 on frozen pork, variety meat, bacon, stomachs and processed meats and hams. Assuming implementation of the KORUS agreement by 2009, the phase down period for these items would be five years. For chilled U.S. pork products, currently assessed a 22.5 percent duty, a safeguard would see duties for volumes moving under and over the trigger levels gradually reduce to zero by 2019. An initial trigger level of 8,250 metric tons of chilled pork will be established in 2009. Duties on U.S. pork sausage would also be eliminated under a five-year phase-out of the current 18 percent duty. 

For U.S. beef, a phase-out of the 40 percent duty in equal annual stages over a 15-year period would start upon the implementation date of the agreement. Duties on beef variety meat will be reduced over the 15-year period, from 18 percent to zero. The 15-year phase-out period also applies to salted and dried beef products and prepared/preserved beef items. Duties on these products currently range from 22.5 percent to 72 percent, but will be reduced to zero over 15 years following implementation of the agreement.

Safeguards apply to both fresh/chilled and frozen boneless and bone-in cuts of beef. The beginning volume for the safeguard is significantly larger than the 213,000 metric tons (mt) of U.S. beef exported to South Korea in 2003. Upon implementation, the safeguard will be 270,000 mt and increase each year for 15 years while duties for both under and over trigger volumes are gradually reduced to zero. For example, during the 15th year, the safeguard would be 354,000 mt and the over-safeguard duty 24 percent while imports within the safeguard are duty-free. The 16th year marks the end of the safeguard and duty for all imports reduces to zero.   

For lamb, all duties will be phased out over a 10-year period, from 22.5 percent to zero following implementation of the agreement.

For more information on tariff phase-outs and safeguards, see the USMEF analysis for beef, pork and lamb.

In another development, South Korea's Deputy Minister of Agriculture announced Monday (May 28) that South Korea will likely complete its eight-step risk assessment process for expanded U.S. beef product access by September. Talks on expanding U.S. beef access related to the attainment of an OIE “controlled risk” level designation for BSE were interwoven with the free trade talks, but not a formal item of the KORUS discussions.