Yonhap News, Seoul
S. Korea-U.S. FTA causes drop in beef, pork prices: gov't
By Lee Joon-seung
9 July 2007
SEOUL, July 9 (Yonhap) -- Beef and pork prices in South Korea fell year-on-year in the second quarter for the first time in eight years, apparently due to the proposed free trade pact with the United States, the government said Monday.
The National Statistical Office and the state-run Agriculture and Fisheries Marketing Corp. (AFMC) said prices for imported and domestic beef fell 3.7 percent and 2 percent, respectively, from April through June, while pork prices dropped 6.9 percent from a year earlier.
This is the first time since the first quarter of 1999 that pork and beef prices have both gone down together.
Experts said the decision to sign a free trade agreement (FTA) on April 2 caused prices to go down in anticipation of cheaper American products entering the country. The FTA, which could go into effect in 2009, would gradually lower and eventually scrap the 40 percent import duties levied on imported beef over the next 15 years. U.S. beef accounted for the bulk of imports before Seoul banned them after the discovery of a case of mad cow disease in late 2003.
South Korea has since lifted the ban and the first shipments cleared customs on April 27. As of last month, Seoul has imported roughly 700 tons of U.S. beef this year.
"Expectations about American beef are causing Australian meat prices that had been rising steadily in the past few years to fall off, and this has also triggered a drop in local beef and pork," an AFMC official said.
Pork prices are affected because people could opt to eat cheaper beef instead of pork.
He added that a past study by the AFMC on the impact of the FTA showed the price of local premium beef falling 6.4 percent to 39.2 percent, and pork prices dropping 4.1 percent to 18.5 percent.
He said if bone-in beef, including ribs, are imported from the U.S. it could further depress local meat prices. South Korea only allows imports of beef from animals under 30 months old but has started discussing adjustment of import standards with the U.S.
Washington, meanwhile, stressed that easing import rules on bone-in beef is a prerequisite to ratifying the FTA by its lawmakers. Some South Korean economic policymakers speculated that easing of import rules could take place in September.
