1. BILATERAL/MULTILATERAL ISSUES

Korea records trade deficit with EU after FTA implementation [Korean: BYK]

http://www.dt.co.kr/contents.html?article_no=2011080202010457731002

Summary: After the implementation of the FTA with EU on July 1, 2011, Korea recorded a trade deficit with EU during the first month of FTA implementation.  Total export to EU in July was $4.08 billion, whereas total imports from EU marked $4.14 billion, a trade deficit of $60 million.

S. Korea posts trade deficit with EU following FTA [English, CSY]

http://english.yonhapnews.co.kr/business/2011/08/01/0502000000AEN20110801005400320.HTML

Summary: South Korea logged a trade deficit with the European Union last month as imports spiked from the region after both implemented a free trade deal, customs data showed Monday.  The free trade agreement (FTA) between South Korea and the EU went into effect on July 1. 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.

One Month since Implementation of Korea-EU Free Trade Agreement … Korea’s Imports from EU up 34%, Korea’s Exports to EU down 12% [Korean, OSY]

http://news.donga.com/Economy/3/01/20110802/39239794/1

Summary: According to the Korea Customs Office, during the first month (July) since implementation of Korea-EU FTA, Korea’s imports from EU increased 34 percent while Korea’s exports to EU dropped 12 percent compared to the same month of last year.  The decline in exports to EU was something unexpected.  Market analysts interpreted that the financial crisis in EU had been the major reason for the decline.

2. ECONOMIC ISSUES

Prices up 4.7% despite gov’t efforts [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2939668

Summary: Korea’s consumer price growth remained above the central bank’s annual target of 4 percent for the seventh consecutive month in July, casting doubt on the government’s months-long efforts to stabilize prices.  According to Statistics Korea yesterday, the country’s consumer price index rose 4.7 percent last month compared to the same month last year. The increase accelerated from the previous month’s 4.4 percent growth.  Core inflation, which excludes volatile oil and agricultural prices, rose 3.8 percent on-year in July, representing the highest growth in 26 months. In June, core inflation was 3.7 percent on-year. Last month’s inflationary pressure was due mainly to price hikes in fresh food, transportation and housing.

“Last month, prices of fresh foods rose significantly due to the heavy rain,” said Yang Dong-hee, head of Statistics Korea’s price statistics department. According to the agency’s report, Korea’s fresh food price index jumped 9 percent last month from the previous year, which is the highest in four months.  Heavy rainfall devastated some of the country’s farmlands and disrupted the supply of farm goods, driving up prices of vegetables and fruits including cabbage, spinach, lettuce and cucumbers. During the country’s official monsoon season from June 22 to July 12, the country’s average precipitation was 551.2 millimeters, which is triple the amount of the 30-year average of 194.8 millimeters.

How is core inflation driving up consumer prices in Korea? [English, CSY]

http://english.donga.com/srv/service.php3?bicode=020000&biid=2011080248118

3. LIVESTOCK ISSUES

Farmers’ strike may lead to milk shortage [English, CSY]

'集乳 중단' 선언…우유대란 점점 현실로

http://joongangdaily.joins.com/article/view.asp?aid=2939678

Summary: The Korea Dairy and Beef Farmers Association announced yesterday that it will stage a one-day strike and stop providing 5,200 tons of milk to dairy companies tomorrow after price-hike talks failed Sunday.  The association pledged to launch an indefinite strike if its request to raise the milk supply price from the current 704 won per liter ($2.53 per gallon) to 877 won isn’t accepted by Friday.  “Foot-and-mouth disease and the rising cost of animal feed are making it increasingly difficult for farmers to eke out a living and the hike is unavoidable,” said an official at the Korea Dairy and Beef Farmers Association.  The announcement came after the association’s request was rejected in a July 31 meeting with the Korea Dairy Industries Association and the Korea Dairy Committee.

4. MARKETING ISSUES

In agriculture, Korea has too many brands [English, CSY]

Lots of fancy names and packaging but ignorance in building products

이름·포장지뿐인 농·축산 브랜드 5340개 난립

This indicates that farms and orchards are basically spending money for branding that just isn’t working. The main reason for the excessive number of brands is that each region’s agricultural and meat distribution centers create their own.   According to research by the food ministry, each of the 912 rice processing complexes in the nation produced an average of 1.7 brands. Some sell 10 different brands.

Import Duty Removed on Banana, Pineapple, Cabbage, and Radish until September 30[Korean, OSY]

http://www.yonhapnews.co.kr/economy/2011/08/02/0301000000AKR20110802054300002.HTML?template=2087

Summary: Ministry of Finance and Planning announced on August 2 that import duties on banana, pineapple, cabbage, and radish will be removed temporarily until September 30.  This measure is to help stabilize price of agricultural products in the market.  In addition, existing duty reduction on processed pork meat (limited volume) will be expanded to all imports.

5. OTHER MISCELLANEOUS ISSUES

Port of Inchon Puts Efforts to Receive More International Cruise Ships [Korean, OSY]

http://news.donga.com/Society/New/3/03/20110802/39240107/1

Summary: A total of 20 international cruise ships were accommodated in the port of Inchon during the first half of this year.  The number of foreign cruise ships visited the port of Inchon has been on a significant increase in recent years (3 in 2007, 6 in 2008, 15 in 2009, 15 in 2010, 20 in the first half of 2011).  A visit of a cruise ship generates about $1 million of economic value to the local economy.  Under a plan to make the port of Inchon a leading port for international cruise ships, the city of Inchon has been putting efforts, including building of a new international cruise ship terminal.