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Korea Announces 'Hollow Victory' in Resuming Boneless Beef Trade

South Korea and U.S. beef trade resumption negotiations concluded this week with an agreement to resume trade of boneless beef from cattle less than 30 months of age under a Beef Export Verification Program. Secretary of Agriculture Mike Johanns anticipates trade will resume "toward the end of March after Korea completes its import procedures."

Jay Truitt, National Cattlemen's Beef Association vice president of government affairs, explains that half of the pre-December 2003 $815 million market remains closed to U.S. beef. "The fact of the matter is we'll get $450 million dollars of that market back, but the other $400 million we won't with the current agreement," he says. "We're looking at a hollow victory."

Truitt adds that Johanns' expectation of March trade resumption is feasible but maybe too optimistic. U.S. Trade Representative Rob Portman expressed disappointment that Korea did not fully open its market to all U.S. beef products. "We will continue to urge Korea in the strongest terms to open its market without delay to U.S. bone-in beef, variety meats, and offal," Portman says.

All things are possible of capturing the lucrative bone-in beef segment if South Korea gets more serious about pursuing a Free Trade Agreement with the United States. Truitt says the expiration of Trade Promotion Authority in June 2007 has countries pushing to get the ball rolling.

Korea FTA talks may provide a great platform for demanding international standards which says bone-in beef under 30 months of age is safe. "NCBA will not be supportive of any final free trade agreement that doesn't give us a good scientific agreement for beef trade," says Truitt.

Truitt says it's hard to project U.S. beef acceptance in Korea without short ribs. He explains it was a key component of Korea's beef market. "We don't know what the impact of that decision will be on overall imports," he adds.

Secretary Johanns adds, "As we continue discussions with Korea, I urge Thailand, China, Taiwan, Singapore and others to comply with science-based international guidelines and reopen their markets to U.S. beef."

The United States has been working with Korea and other countries around the world to remove the remaining restrictions on imports of U.S. beef. Since the closing of many U.S. export markets in December 2003, the United States has recovered access to markets valued at more than $3.2 billion, or 82% of the 2003 export value of $3.9 billion.