Trade Update: South Korea, Mexico, Vietnam

South Korea

The first shipment of beef in almost three years arrived in South Korea Oct. 30 and as of press time was awaiting customs clearance. The USDA, in a letter to South Korean officials dated Sept. 22 said “critical issues remain unresolved before we can consider the recent announcement of the opening of the Korean beef market to be a commercially-viable agreement.”  South Korea was the third largest foreign market for U.S. beef until December 2003, when the USDA announced the first case of BSE in the United States.

On Sept. 8, South Korea agreed to ease its nearly three-year-old ban on U.S. beef, but imposed strict conditions that allowed only boneless cuts to be shipped. The uncertainty of what South Korea may consider to be “risky” bovine material, combined with concerns over what the country will do if it finds a bone fragment, have kept trade from resuming, USDA officials said.

U.S. Meat Exporters in Mexico

The U.S. Meat Export Federation (USMEF) held its Strategic Planning and Marketing Conference in Cancun, Mexico. Mexico is the top export market for U.S. beef and beef products, the reason USMEF chose this location for its annual meeting.

“At the rate we are going this year, our U.S. beef exports to Mexico could reach a value of over $1.1 billion,” says NCBA’s Chief Economist Gregg Doud. “This would surpass the value of this market in 2003 (at pre-BSE levels) of $874 million, and the record $893 million exported in 2005.”

Vietnam

NCBA joined 14 other ag industry groups in a letter to members of Congress urging swift action on permanent normal trade relations (PNTR) status for Vietnam.  The letter asks Congress to pass PNTR status for Vietnam as soon as it reconvenes in November.

Vietnam and the United States signed a World Trade Organization accession deal May 31, and Vietnam’s accession to the WTO is imminent.  But Congress must pass PNTR for the U.S. to fully benefit from Vietnam’s accession.

For cattlemen, the U.S. has negotiated a lucrative bilateral market access package with Vietnam.  Under the terms of the agreement, approximately three-fourths of U.S. agricultural exports — including beef — to Vietnam will have duties reduced to 15 percent or less, while Vietnam will gain no greater access to the U.S. market. Vietnam was roughly a $9.5 million market for U.S. beef and beef variety meats in 2005 after reopening its market in November 2004.