Today's Date:     Wednesday, February 22, 2012

1. BILATERAL/MULTILATERAL ISSUES

Implementation Date of the Korea-U.S. Free Trade Agreement May Surface from Korea-U.S. Meeting This Week [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2012021951801&sid=01010401&nid=002&ltype=1

Summary: Trade representatives from Korea and the U.S. are meeting in Washington DC on Feb. 19 and 20, which will check current status of the preparatory work in both countries for implementation of the KORUS FTA.  A person in the Korea Trade Negotiation Office mentioned in an interview that “both countries have already completed over 95 percent of the work required to start the FTA.  If the meeting in Washington DC this week finds no big pending issues, both sides should soon be able to set a date of official implementation of the FTA”.  If is expected that both countries will exchange letters within this month, confirming completion of all the required works for the implementation of the FTA.  Actual implementation date of the FTA will be within 60 days after the exchange of the confirmation letters, or on the date that both countries agree on.

American and Chinese fresh agricultural products next to Korean products in shopping marts [Korean: YJY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=199298

Summary:  Chinese broccolis and carrots were only seen in shopping marts during summers when Korean production normally decreases.  American potatoes were even more rarely found.  Only Chilean and American grapes were sold together with Korean grapes.  However, everything changed in a couple of years.  Since more people go abroad for traveling, business trip, and study abroad programs, less people are hesitant to eat imported products.  In addition, adverse weather condition destabilized supply of agricultural goods.  This led more consumers to experience purchase of imported agricultural products.  Big shopping marts have also shifted their stance from prioritizing provision of Korean agricultural goods to selling imported items.

Korea-US FTA to take effect on March 15 [English: CJW]
http://www.koreatimes.co.kr/www/news/nation/2012/02/113_105405.html
Summary: The free trade agreement between Korea and the United States (KORUS FTA) will go into effect on March 15, six years after the two countries kicked off talks on the trade pact in June 2006.  Trade Minister Bark Tae-ho announced Tuesday that Deputy Trade Minister Choi Seok-young had met his counterpart Wendy Cutler, assistant U.S. trade representative, in Seattle early this week to agree on the date of implementation.  The accord means that Korea will be the only country to run free trade pacts with both the U.S. and the European Union. Its FTA with the EU took effect last July.

European Premium Brands Fail to Reflect FTA in Prices [English, CSY]

http://english.chosun.com/site/data/html_dir/2012/02/21/2012022100458.html

Summary: The effects of the Korea-EU FTA are already evident in the prices of anything from food to bedding, but label-addicted Koreans are aggrieved that luxury goods and premium brands are as expensive as ever. The big logos have managed to turn tariff reductions straight into profit without cutting a single won off their prices and, on the contrary, hiked them wherever they can get away with it.   A survey by the Chosun Ilbo of the prices of major goods from Europe included in the Korea-EU FTA from Feb. 15 to 17 shows that there was no price reduction among European household goods and home appliances makers like Philips, Braun, Tefal and Delonghi after the FTA came into effect last July.  When consumers complained, the makers said that these items are not part of the FTA because they are in fact manufactured in China. But they maintained the prices of premium items that are made in Europe as well. 

As for wine, which was immediately exempt from 20 percent customs duty, prices dropped by about 10 percent shortly after the FTA, but the prices of some items remained the same? Prices of whisky, which also became exempt from 20 percent customs duty, remained unchanged. The industry claimed the price of alcoholic drinks is determined not only by customs duty but largely by domestic taxes, but it failed to explain why it did not get reduced even by a little.

Korea-US FTA to Take Effect on March 15 … Revision Found ‘Balanced Interest’ by Exchanging Concessions on Auto and Pork  

http://www.hankyung.com/news/app/newsview.php?aid=2012022109971

Summary: Korea and the U.S. government  announced on February 22 that the KORUS FTA will take effect on March 15.  The agreement, originally signed by the previous government under the late president Roh, was once revised in November 2011.  While the United Democratic Party and left-wing politicians still demand renegotiation or abolition of the agreement, many Korean economic institutes as well as industry organizations are welcoming the implementation of the KORUS FTA.  Korean Trade Negotiation Office (KTNO) commented that the revision made to the agreement last year, in which both countries exchanged additional concessions on some of the sensitive products such as automobile and pork meat, was more beneficial to Korea. 

2. GRAIN & OILSEED ISSUES

Korean vegetable seed exports soar [Korean: YJY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=199137

Summary:  Korea’s vegetable seed export made a great leap, thanks to the establishment of foreign corporate body and government efforts like the Golden Seed Project to develop seed industry.  Last year, vegetable seed export made a profit of approximately $325 million.  This is 41% increase from 2010 figure of $230.4 million.  Vegetable seed import also increased around 31.3%, recording approximately $509.2 million.

Complaints in the rice farming sector concerning poor seedlings and rice seed sprouts [Korean: YJY]

http://www.nongmin.com/jacmok/ar_detail.htm?ar_id=199239
Summary:  Filing complaint cases have increased concerning raising seedlings.  Last year, in particular, there were numerous cases of damaged rice seed sprouts and poor seedlings.  Rural Development Administration (RDA) analyzed this was caused by adverse weather condition during grain filling seed resulting in lower seed vigor, low temperature during sowing season, and mismanagement.  RDA urged for the selection of high quality variety fit for cultivation area and purpose and proper seeds. 

3. LIVESTOCK ISSUES

Livestock distribution system to be changed [Korean: CJW]
http://www.nongmin.com/article/ar_print.htm?ar_id=199099
Summary: Korea government will focus on improving the distribution of livestock by promoting cooperative packer.  Also, the government will set upper and lower limit price of the livestock products by item.  MIFAFF plans to increase the market share of Hanwoo from 8.3% in 2010 to 50% in 2015 and market share of pork from 0.5% in 2010 to 18% in 2015.  By doing so, MIFAFF explained that it will reduce consumer price by 6.5%.

4. MARKETING ISSUES

Korean Food Service Companies Seek New Growth Opportunity in Foreign Markets [Korean, OSY]

http://news.donga.com/3/all/20120219/44169520/1

Summary: Many of the leading food service companies in Korea  are reportedly planning to expand business into foreign markets.  A good example is Mr. Pizza and Café Bene, the leading player in pizza restaurant and espresso café market respectively.  Mr. Pizza has announced recently that its goal was to open 1,000 outlets in China by 2015.  Café Bene, which had opened its first outlet in Manhattan, N.Y. City recently expressed that it planned to open a total of 50 outlets in the Manhattan area.

Local Peanut Price Hits 16 Year High [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2012022074671&sid=0104&nid=004&ltype=1

Summary: Price of local peanut marked 11,600 won per kilogram in the wholesale market on February 20, up 14.5 percent from the previous month, which was the highest level since 1996 according to the Korea Ag Marketing Corporation (aT).  The surge of price is due to a 30 percent decline in peanut farm acreage last year.

5. OTHER MISCELLANEOUS ISSUES

Farming emerging as new job of choice [English: CJW]
http://www.koreatimes.co.kr/www/news/biz/2012/02/123_105271.html
Summary: A growing number of city dwellers are giving up their jobs in bursting city centers to head for farms across the country.  The Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) said Monday that an all time-high of around 6,500 households moved from cities to rural areas last year.  ``In the past, our farms and ranches were remembered as places where just a few senior citizens lived. But the influx of former city residents is breathing new life into the areas,’’ MIFAFF Director Kim Jong-gu said.

Origin identification expansion will bring up social welfare around KRW 750 billion [Korean: YJY]
http://www.nongmin.com/article/ar_detail.htm?ar_id=199203

Summary:  With the origin identification system, Korean producers will experience increased economic profit and consumers will be able to choose products according to their preferences.  KREI conducted an analysis of chili powder, bean, bean curd, beef, pork, and ham and concluded that welfare increase amounted to KRW 471.5 billion to 754.3 billion annually, setting 2010 as the base year.  KREI also pointed out that processed food are exceptionally allowed to be labeled ‘imported,’ as origin frequently changes, but this must be changed in accordance with the principle of identifying the exporting country.

Imports of Japanese fishery products dip [English, CSY]

http://www.koreatimes.co.kr/www/news/biz/2012/02/123_105378.html

Summary: Fears of nuclear contagion seemingly prompted Koreans to almost halve their imports of Japanese fishery products in the aftermath of the Fukushima accident in last year.  The Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) announced Wednesday that the country imported a total of 40,466 tons of marine products from Japan in 2011, down 47 percent from a year before.  Instead, Korea turned to Chile and Russia as inbound shipments from the two countries rocketed by 67 and 13 percent year-on-year in 2011, respectively.

Farming emerging as new job of choice [English, CSY]

http://www.koreatimes.co.kr/www/news/biz/2012/02/123_105271.html

Best-selling Chilean Wines Lower Price [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2012022104821&sid=0104&nid=004&ltype=1

Summary: ‘1865’, a leading Chilean wine sold in Korea announced that its retail price would be lowered 10 percent from March 1.  ‘Montes Alpha’, another leading Chilean wine brand announced similar range of price cut a week ago.  President of Keumyang International, the importer of ‘1865’ wine, commented that the recent revision of the liquor regulation that allowed import companies to sell directly to the consumers made the price cut possible.

6. MIFAFF PRESS RELEASES

► MIFAFF hosted 2nd inauguration ceremony of promotion committee for the globalization of Korean food (Hansik) cuisine

► MIFAFF to distribute educational book to help children have the right dietary life through environmentally-friendly agriculture

► In response to the nuclear incident in Japan, MIFAFF announced that imports from Japan have decreased by 44% since 2011.