FAS/Seoul Monitoring of Media Reporting on Agricultural Issues
Today's Date: Thursdsay July 07, 2011
For Coverage: July 06- July 07, 2011
1. BILATERAL/MULTILATERAL ISSUES
S. Korea likely to benefit much from FTA with EU: finance minister [English, CSY]
http://english.yonhapnews.co.kr/business/2011/07/06/0502000000AEN20110706002800320.HTML
Summary: South Korea will likely benefit much from the recently-implemented free trade deal with the European Union in its efforts to enhance the nation's overall competitiveness, the top economic policymaker said Wednesday. The free trade agreement between South Korea and the EU went into effect on Friday. Under the deal, both sides will eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect.
S. Korea, Indonesia to meet on free trade deal this week [English, CSY]
http://english.yonhapnews.co.kr/business/2011/07/06/0502000000AEN20110706004700320.HTML
Summary: South Korea and Indonesia will hold the first round of feasibility study talks on a bilateral free trade deal this week, Seoul's trade ministry said Wednesday. In 2007, a free trade agreement between South Korea and the Association of Southeast Asian Nations (ASEAN), which includes Indonesia, went into effect. But Seoul has been seeking to forge higher-level separate free trade deals with Indonesia, Malaysia and other Asian countries.
<7/3/2011>U.S. KORUS FTA export estimates far exceeds S.Korea’s [English, CSY]
The study calls into question S.Korea’s conservative estimates of potential drawbacks to the domestic agricultural industry
http://english.hani.co.kr/arti/english_edition/e_business/485711.html
Full text: U.S. analysts are predicting an average annual rise of $1.9 billion (approximately 2.1 trillion won) in exports of U.S. agricultural products to South Korea after the South Korea-U.S. Free Trade Agreement (KORUS FTA) takes effect. This marks a full 5.2 times the $370 million predicted by South Korean analysts. Questions are now being raised about whether the government conducted an accurate analysis of the economic effects of the FTA and its damages to the agricultural and livestock sector.
According to analysis Sunday of a U.S. Department of Agriculture report published in April on the effects of trade agreement on the U.S. agriculture industry, the U.S. predicted an average annual increase of $1.9 billion in exports of U.S. agricultural and livestock products to South Korea as South Korean tariffs disappear and tariff-rate quota (TRQ) quantities increase when the KORUS FTA takes effect. This is 5.2 times the $370 million resulting increase estimated by the Korea Rural Economic Institute in April 2007, as well as 3.1 times the estimated 669.8 billion won in reduced agricultural production.
The South Korean government has been using the KREI analysis of economic effects as a basis in formulating measures to address damages.
The USDA report predicted a major increase in exports of U.S. beef, pork, and dairy product exports to South Korea after the FTA takes effect. An average increase of roughly $563 million per year was predicted for U.S. beef with the uniform elimination of the 40 percent tariff over a fifteen-year period, far exceeding the $518 million in 2010 U.S. beef imports.
An annual increase of $276 million in U.S. pork exports was predicted with the elimination of the 22.5 to 25 percent tariff. The analysis also predicted an average annual increase of $93 million in imports of dairy products such as raw milk and cheese, principally through TRQ imports.
Observers say the 2 trillion won increase in exports predicted by the United States, which amounts to 7.4 percent of the 27 trillion won gross domestic product of the South Korean agriculture, seafood, and livestock industry in 2010, appears likely to have a significant negative impact on the domestic agricultural industry. Democratic Labor Party Lawmaker Kang Ki-kab said, “The South Korean and U.S. governments are making entirely different predictions about the scale of damages from the KORUS FTA.” “There are questions as to whether the government’s analysis of economic effects was properly conducted,” Kang added.
Congress ready for discussions on FTA with S. Korea [English, CSY]
http://english.yonhapnews.co.kr/national/2011/07/07/30/0301000000AEN20110707001000315F.HTML
Summary: The U.S. Congress looks set to begin a full-scale review of bills later this week on major trade pacts with South Korea, Colombia and Panama, while a proposed renewal of a costly program to help American workers remains a potential deal-breaker. The Democrat-led Senate Finance Committee plans to open a "mock" markup of the draft implementing bills for the free trade agreements (FTAs) on Thursday, according to committee chairman Max Baucus (D-Mont.) The session, originally supposed to take place a week ago, was canceled due to a Republican boycott.
Baucus said in a press release that the new date was set "after consulting with members" of the committee and it would touch on a controversial extension of the Trade Adjustment Assistance (TAA) program to minimize the negative impact of trade on U.S. workers. President Barack Obama said he would not submit the bills on the FTAs unless Congress agrees to extend the US$1 billion-a-year TAA program, which expired in 2010. Republican members oppose it amid a partisan budget war.
2. ECONOMIC ISSUES
<7/5/2011>S. Korea's core inflation grows faster than OECD average: data [English, CSY]
http://english.yonhapnews.co.kr/business/2011/07/06/95/0502000000AEN20110706001500320F.HTML
Summary: South Korea's core inflation in May grew at a faster pace than the average price hike among the member countries of the Organization for Economic Cooperation and Development (OECD), data showed Wednesday. According to the data offered by the Paris-based organization, South Korea's core inflation rose 2.8 percent in May from a year earlier. That is higher than the OECD average of 1.7 percent. The OECD measures core inflation by excluding food, agricultural, fishery and livestock products along with energy prices, unlike the method used by Korea in which only farm product and oil prices are excluded. Based on the OECD surveys, Korea's core inflation grew at the seventh-fastest pace among member countries. Turkey topped the list with a 4.5 percent gain, followed by Britain, Israel, New Zealand, Slovakia and Mexico, the data showed.
3. LIVESTOCK ISSUES
‘VIP Breeding Pigs’ Imported via Air Cargos … from the U.S. and Canada [Korean, OSY]
http://news.donga.com/Economy/New/3/01/20110706/38601696/1
Summary: According to the Ministry of Ag. and livestock industry, Korea has imported 2,300 breeding pigs this year through 12 shipments since June 3. The pigs were mostly from the U.S. and Canada and were brought in via air cargos to minimize travel time. Korean livestock industry lost some 3.3 million pigs earlier this year due to foot & mouth disease outbreak, including 330,000 breeding stocks. The pigs imported will help rebuild local swine industry. Korean government has eliminated the import tariff (18 percent) on 5,000 live pigs that will be imported throughout this year.
4. NORTH KOREA ISSUES
‘Noting’ EU action, U.S. undecided on food aid [English, KJH]
http://joongangdaily.joins.com/article/view.asp?aid=2938553
Full Text: WASHINGTON - The United States said Tuesday that it “understands” the European Union’s decision to provide North Korea with food aid but stressed that it will make its own decision on aid.
“We have noted the EU’s move. We have talked to the EU about its move. And we understand their decision. We have not made our own decision,” State Department spokeswoman Victoria Nuland said at a press briefing.
The EU announced earlier this week that it will send food aid worth 10 million euros ($14.5 million) to North Korea, said to be suffering a severe food shortage. The EU’s decision follows a June trip by a team to assess the food situation there.
The EU said its plan for the food shipment is to save the lives of 650,000 vulnerable residents in the communist nation despite long-stalled denuclearization efforts.
The first batch of delivery, apparently non-rice products, is scheduled to arrive there next month.
Observers said the EU’s initiative will put pressure on the U.S. and South Korea, which are considering similar assistance.
Nuland sidestepped a question on whether the U.S. welcomes the EU’s decision, instead choosing the word “understand.” When asked if the EU’s move will affect Washington’s consideration of aid, she did not give a direct answer. “Obviously, we are in close touch with the EU on these issues,” she said.
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”.
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