Today's Date:     Tuesday, December 20, 2011

For Coverage:    December 19 - 20, 2011

 

1. BILATERAL/MULTILATERAL ISSUES

 

Korea, Israel to Begin Negotiations for FTA by April 2012: Israel's Trade Ministry [English, CSY]

http://www.arirang.co.kr/News/News_View.asp?nseq=123772&code=Ne2&category=2

Full text: Korea and Israel will begin negotiations to establish a free trade agreement between the two countries by April next year.  This is according to Israel's Industry, Trade, and Labor Ministry in a statement released on Sunday.   The Jerusalem Post, a leading daily in Israel, also reported Sunday that its Trade Minister Shalom Simhon announced the opening of negotiations alongside his Korean counterpart at a World Trade Organization meeting in Geneva.   Simhon said the agreement would advance trade and technological cooperation between the parties.  Israel's exports to Korea, excluding diamonds, in the first nine months of 2011 topped 5-hundred million US dollars and imports during the period amounted to 1.1 billion.

 

<12/17/2011>Korea, China, Japan to pursue trilateral free trade agreement [English, CSY]

http://english.donga.com/srv/service.php3?bicode=020000&biid=2011121742338

Summary: Korea, China and Japan have begun negotiations for a trilateral free trade agreement, saying they are seeking a “high level of comprehensive free trade.”   Delegates from the three countries held their seventh joint meeting of industry, government and academia in Pyeongchang, Gangwon Province on Friday. They officially adopted a research paper to be reported to a trilateral summit in Beijing in May next year after undergoing reviews and ministerial meetings.  In a joint statement, the delegates said, “The Korea-China-Japan FTA will bring economic benefits to all of the three countries and are workable,” adding they will consider sensitive sectors while seeking a comprehensive and high level of agreement.

 

The statement suggests that they will minimize exceptions from market opening and grace periods. Under Korea`s free trade agreements with the European Union and the U.S., tariffs on 95.7 percent and 99.6 percent of goods and services traded will be abolished, respectively.   For agricultural products, which are expected to be the hottest issue for the trilateral accord, the delegates deferred the judgment on the level of market opening to the main negotiations. "We advise each country to abolish tariff and non-tariff barriers after properly considering sensitivity," the statement said.

 

2. MARKETING ISSUES

 

S. Korea to lower tariffs on 103 items to stabilize prices [English, CSY]

http://english.yonhapnews.co.kr/business/2011/12/20/85/0502000000AEN20111220004500320F.HTML

Summary: South Korea will lower tariffs on a total of 103 products next year in a bid to help stabilize prices of goods frequently consumed by ordinary citizens, farmers and small enterprises, the finance ministry said Tuesday.   The items, whose tariffs will be temporarily lowered or removed throughout next year under the tariff quota system, will include raw sugar, pork, garlic and butter, according to the Ministry of Strategy and Finance.  There will be less products than the 112 imports that were eligible for lower tariffs this year. Of the total, 88 items are already on the list, while 15 are newly included.  The newly-added goods include sweet potato starch, oats and artificial graphite. Chicken, coffee beans, flour, gasoline, detergent and others were excluded from the list, the ministry said.

 

aT Survey Confirms Price Hikes of Agricultural Products This Year [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20111219/42732825/1

Summary: The Korea Agro-Fishery Marketing Corporation (aT) has released a yearly price survey result for food and agricultural products.  The survey confirmed that retail price of most of the products went up significantly from last year: Dried pepper (77%), Dried squid (57.4%), Fresh squid (38.9%), Apple (32.2%), Sweet potato (30.8%), Pear (27.7%), Mackerel (22.6%), Pork meat (21.5%), Eggs (16.8%), Rice (8.7%).

 

ROKG Gov’t Announces Applied Tariffs Schedule for 2012 … Includes More Products for Feed Use to Support Livestock Farmers [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2011/12/20/0301000000AKR20111220075151002.HTML?template=2088

Summary: On Dec. 20, ROKG announced a list of 103 products that will be subject to lower import duties (applied tariffs) next year, which include pork meat, raw sugar, dried pepper, and garlic.  In particular the applied tariffs for next year include more products for feed use (from 11 in 2011 to 22 in 2012) to support the local livestock industry, according to the Ministry of Strategy & Finance.

 

3. OTHER MISCELLANEOUS ISSUES

 

<12/15/2011>Agriculture ministry vows efforts to boost food exports in 2012 [English, CSY]

http://english.yonhapnews.co.kr/business/2011/12/15/6/0501000000AEN20111215006200320F.HTML

Summary: South Korea will work to boost its food exports by more than 30 percent to US$10 billion as part of its policy goals for next year, the Ministry of Food, Agriculture, Forestry and Fisheries said Friday.  The move comes as the country is expected to implement its free trade agreement with the United States in early 2012, which, the ministry earlier said, could lead to a reduction of 12.67 trillion won ($10.9 billion) in production by the country's agricultural, farming and fisheries industries.   "The best way to help develop local industries is to boost their exports, which surely has to be based on increased production here," said Park Hyun-chool, assistant minister for planning and coordination.   The plan, along with other policy objectives for the ministry, were presented to the president in a report Friday. 

 

South Korea's food and agriculture exports surged to a new annual high in the first 11 months of the year with its total shipments expected to reach $7.6 billion.   A 31-percent increase to $10 billion is not an easy task, Park noted.   "It will be a really difficult goal to achieve, but one that shows the government's firm resolution to achieve," he told a press briefing.  Efforts to boost exports will include an injection of up to 800 billion won in government subsidies and low-interest loans in 2012 alone to help modernize the country's aging production facilities.  "Modernization of production facilities is the most important element in boosting production, which supports increased exports," the assistant minister said. A total of 10 trillion won will be injected over the next 10 years toward that end.

 

Government to Continue Push to Stabilize Prices [English, CSY]

http://www.koreaittimes.com/story/18980/government-continue-push-stabilize-prices

Summary: SEOUL, KOREA --- The government held its weekly ministerial meeting on consumer prices on December 19 to examine the outlook for prices and to discuss recent trends in the supply of agricultural and livestock products as well as plans to stabilize key prices next year. Minister of Strategy and Finance Bahk Jae-wan chaired the meeting.  Statistics released last week showed that import prices and producer prices fell 1.6 percent and 0.2 percent, respectively, month-on-month in November due to the stabilization of the exchange rate and the decline in the price of industrial products. The drop in prices is expected to have a positive effect on consumer prices overall.

 

Due to seasonal conditions, there is a possibility of a drop in supply of vegetables and an adjustment of service charges, as well as an increase of inflationary sentiment ahead of the Lunar New Year holiday in January.  The government will put top priority on stabilizing the lives of citizens in 2012 by stabilizing prices and continuing its policy efforts so the price stabilization can be felt by citizens.  According to the Korea Rural Economic Institute, next year’s supply of agricultural and livestock products will be stable overall with an increase in supply of vegetables as well as livestock products such as beef and chicken.

 

The U.S. Brings China to WTO as China Imposes Over 100% Penalty Import Duty on American Chicken Feet [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2011121954251&nid=005&sid=01051801

Summary: Washington Post reported on Dec. 19 that the U.S. government has recently brought China to the WTO dispute arbitration panel in a response to China’s imposing of over 100 percent import duty on American chicken feet last year.  Introduction of the duty was due to strong complaints from local chicken farmers who argued that American chicken feet was imported into China at below the market price based on the U.S. government subsidy program.  Since the introduction of the penalty import duty, American chicken feet export to China declined 90 percent.  James Sumner, president of the USPEEC commented that “there is a pressure in the industry that we should return back to the China market, and we hope that the WTO process will move forward promptly”.  Just like in Korea, chicken feet is a popular side dish for alcohol beverages in China.

 

The information in this report was compiled by the Agricultural Trade Office (ATO) at the U.S. Embassy in Seoul, South Korea. The press summaries contained herein do NOT reflect USDA, the U.S. Embassy, or other U.S. government agency official policy or view point. U.S. food exporters can learn more about market opportunities in South Korea by reviewing ATO Seoul’s Exporter Guide and other reports available at www.fas.usda.gov by clicking on “attaché reports”.