Beef Buzz News
USMEF’s Korean Director Says U.S. Exporters' Tariff Advantages Grow Due to FTA
Tue, 04 Dec 2012 16:02:36 CST
Jihae Yang talks about early advantages of the U.S.-Korea FTA.
With exports of both U.S. beef and U.S. pork to South Korea being lower than in 2011, some observers may question whether the Korea-U.S. Free Trade Agreement - which took effect in March - is living up to its promises.
But as Jihae Yang, Korea director for the U.S. Meat Export Federation (USMEF), explains, although the meat trade with Korea is actually down this year due to unusual circumstances, the United States is experiencing a significant market advantage over Australia.
“The phase-out period for tariff reduction is 15 years for beef. So, as of January 1st of next year, the tariff for beef will be 34.7 percent, but there is still 5.3 percent tariff advantage from 40 percent for Australian beef. So I think that will expedite the smooth flow of chilled beef and also, of course, the FTA will moderate the increasing price of the U.S. beef imported into the Korean market.”
Yang says the difference in price between U.S. beef and Australian beef is because the United States has a free-trade agreement in place with the Koreans, Australia does not.
A surge in Korean domestic beef slaughter of culled cattle accounts for the dampened demand for imported beef overall in 2012. Korea slaughtered 115,000 head in September, a 75 percent increase over last year. Their year-to-date slaughter is about 22 percent ahead of last year.
Domestic beef prices in Korea recently averaged about $5.15 per pound - down only slightly from last year, but 15 percent lower than in 2010. As a result, Korea’s beef imports from all sources (through October) are down 14 percent to 249,461 metric tons (mt). Import volumes are lower from all three of Korea’s main beef suppliers: Australia (125,659 mt, -11 percent), the United States (91,705 mt, -16 percent) and New Zealand (28,059 mt, -19 percent).
Yang says she sees very strong opportunities in the near future for processed pork products, noting that USMEF’s first processed pork showcase in Korea this week has drawn tremendous interest from local importers.
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