South Korea rejected a U.S. request to discuss U.S. beef and poultry imports this week as part of broader talks on a free trade agreement (FTA). But it would appear the U.S. has considerable leverage in the issue, if it chooses to exert it.
The Korea Herald reports the Korea Development Institute (KDI) says the Korean economy is "suffering" and the government needs to further deregulate industry and boost free trade. Hyun Jung-taik, KDI president, called on Korean policymakers this week to boost productivity by easing business regulations and removing trade and investment barriers. Freer trade, he says, can help the economy more efficiently use its limited resources in competitive sectors, which will make Korean businesses more productive.
"A free trade agreement with the U.S., in particular, will expand trade and increase the productivity of high-value service industry," he said. "This will also prompt other countries to commence trade talks with us, spurring the trade liberalization," he says.
A U.S.-Korean FTA would be particularly lucrative for major Korean industries. Korea's Yonhap News reports experts project an FTA with the U.S., which officials hope to wrap up in spring 2007, would help South Korea increase its automobile trade surplus by US$2.1 billion in 2015.
Meanwhile, the U.S. Meat Export Federation (USMEF) says Korea has surpassed Japan for the world's priciest beef.
"It's a dubious honor," says Phil Seng, USMEF president and CEO. "South Korean consumers are now paying the highest prices for average quality beef, in part because of overly strict import policies toward safe U.S. beef."
USMEF estimates beef consumption in Japan and Korea for 2006 will be 794,000 metric tons (mt) and 305,000 mt, respectively, down from 936,000 mt and 390,000 mt in 2003.
-- Joe Roybal