Korea-U.S. FTA would put pressure on Aussie beef

by Editor fleischwirtschaft.com
Tuesday, March 18, 2008

The expected quick resolution of the dispute regarding a free trade deal between South Korea and the US will put Australian beef sales under pressure.

South Korea is the third largest beef export market of Australia.

Glen Fiest, Meat and Livestock Australia's regional manager in South Korea, said that South Korea's new pro-trade president was likely to remove the current restrictions on U.S. beef which had been delaying ratification of the American FTA.

Australia would then have three years to press for a similar deal or face increasingly lopsided competition from its major rival as a 40% tariff on U.S. beef was phased out over 15 years.

South Korea banned US beef in December, 2003, following an outbreak of mad cow disease (BSE) on a farm in Washington State. President Lee has indicated South Korea may lift the ban on bone-in US beef but keep the trade restricted to animals under 30 months.

ABARE, Australia's national commodity forecaster, is tipping that Australia's export to South Korea will slide by 19% to 110,000 tons in 2008-09 and keep falling to 90,000 t by 2012-13 as the US regains market share. However, stabilising the South Korean trade in the longer term may help all exporters, particularly if Australia scores a FTA agreement with Seoul.