News Releases

Date: 7/5/2010

Title: USMEF: Korea FTA has Never Been More Critical

WASHINGTON - The U.S. Meat Export Federation (USMEF) is encouraged by the Obama Administration's recent announcement of its intention to press forward on Congressional ratification of the pending U.S.- Korea Free Trade Agreement. Tariffs on U.S. beef and pork exports to Korea will be eliminated under the terms of the FTA. Currently, tariffs are 40 percent on U.S. beef and 25 percent on most U.S. pork products. The FTA will phase out tariffs on U.S. beef over the course of 15 years. Tariffs would be eliminated on frozen and processed U.S. pork by 2014 and on chilled pork within 10 years.

By value, Korea is this year's fourth-largest destination for U.S. beef exports (through April, $112.3 million) and fifth-largest for U.S. pork ($69.5 million). While imported beef and pork from most of our major competitors face the same tariffs, this situation is changing rapidly. Chile, which has an FTA in place that has already lowered the tariffs assessed by Korea, has captured 14 percent of Korea's imported pork market and its pork exports to Korea are up 22 percent compared to last year. The European Union and Korea have already completed negotiations on an FTA that will eliminate duties on the same schedule outlined in the U.S.-Korea FTA. Korea also recently completed its fifth round of FTA negotiations with Australia, which is its largest foreign provider of beef.

"As the EU and Australia move ever closer to implementing FTAs with Korea, the urgency of the U.S.-Korea agreement becomes all the more pronounced," said USMEF President and CEO Philip Seng. "Korea's high tariffs already impact demand by artificially raising the cost for consumers. But the situation will become even more difficult if our major competitors in the market get a running head start on the tariff reduction process."

Seng said Australia gaining a price advantage would be especially unfortunate now that U.S. beef is regaining market share and finding renewed success in Korea. Beef export value to Korea is running nearly 60 percent ahead of last year, and has been especially strong in recent weeks.



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