By DAVE BLOWER JR.
Farm World Editor

WASHINGTON, D.C. — U.S. and South Korean trade officials have brokered a deal that will allow American beef to cross South Korea’s borders starting in mid-May.

South Korea, along with several other Pacific Rim nations, blocked U.S. beef after bovine spongiform encephalopathy (BSE), or Mad Cow disease, was discovered in a Washington state dairy cow in December 2003. In May 2007, though, the World Organization for Animal Health declared the United States as a controlled risk nation for BSE.

U.S. trade officials are hopeful that this will open more markets to American commodities. South Korea’s ban on U.S. beef has been the main sticking point in advancing the South Korean Free Trade Agreement.

At the time of the ban, South Korea was the third-largest export market for U.S. beef and beef products with annual sales of more than $815 million.

“Since that time, Korea’s economy has grown and more of its population enjoys increased incomes and a better way of life,” explained USDA Secretary Ed Schafer. “That is why Congress’s immediate consideration of the U.S.-Korea Free Trade Agreement (KORUS FTA) is important. Once the KORUS FTA is ratified and implemented, and the current 40 percent tariffs on U.S. beef are fully lifted, the FTA is expected to generate tariff savings of approximately $500 million a year for U.S beef exporters.”

The International Trade Commission estimated, Schafer said, U.S. beef exports to South Korea could increase from $600 million to $1.8 billion under the FTA. “South Korea has raised the bar for other Asian nations, such as Japan, Taiwan and China, and the United States will continue to press for full market access throughout the rest of the Pacific Rim so that unreasonable restrictions on U.S. beef and beef products are fully removed,” Schafer said.

“America’s cattle producers applaud the long-awaited reopening of the South Korean market to U.S. beef,” said Andy Groseta, the National Cattlemen’s Beef Assoc. (NCBA) president. “When I visited Korea in February, I saw first-hand how much Korean consumers want access to high-quality U.S. beef in their supermarkets and restaurants.”

Initially, the trade deal will allow for the shipment of all U.S. beef products (boneless and bone-in beef, as well as variety meats) from animals under 30 months of age. South Korea has agreed that this is a first step toward accepting all U.S. beef products from animals of all ages.

Gregg Doud, NCBA chief economist, said South Korea potentially represents a $1 billion market and could grow to be the United States’ top beef customer.

“For U.S. beef trade, the Korean FTA could be could be the biggest and most important bilateral trade agreement in history,” Doud noted.

National Corn Growers Assoc. President Ron Litterer said he was pleased that U.S. beef producers would once again have access to a key export market.

“For reasons not based on science, corn’s No. 1 domestic customer has been shut out of an important market,” Litterer explained. “Korea’s reopening its market to U.S. beef gives us an opportunity to export beef and to advance a free trade agreement. NCGA is supportive of a U.S.-Korea free trade agreement which would remove trade barriers between the United States and the Republic of Korea. A trade agreement would also create new export opportunities for corn growers.”

The National Pork Producers Council hopes this is the first step in acquiring a free trade agreement with South Korea. The trade pact would contain “tremendous” benefits for U.S. pork producers, said NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio.

According to Iowa State University economist Dermot Hayes, if the FTA is fully implemented, total U.S. pork exports to South Korea will rise to nearly 600,000 metric tons. That’s about twice as much as the amount currently shipped to Japan, the No. 1 export market for U.S. pork. Hayes also estimates that the agreement will increase U.S. live hog prices by $10.

“This is the single most important trade agreement ever for the U.S. pork industry,” Black added.

This farm news was published in the April 23, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.