1. BILATERAL/MULTILATERAL ISSUES

Korea-China Negotiation Reached an Agreement on Free Trade Deal [Korean, OSY]

http://news.donga.com/3/all/20130907/57512099/1

Summary: The first round negotiation of Korea-China Free Trade Agreement was completed on September 6 after the two countries started the talk since May 2012.  Korea and China agreed that the FTA will eliminate import tariffs of 90 percent of the goods traded between them.  The scope of tariff elimination agreed was much higher than what was expected earlier (80 percent).  The second round negotiation which would start as early as November 2013 will discuss the sensitive products that will be excluded from the FTA.  The Korean head of the trade negotiation team mentioned in the press interview that there would be plenty of room for Korea to exclude agricultural products from the FTA with China.

2. GRAIN & OILSEED ISSUES

Korean Government Decides to Open the Whole Rice Market from 2015 [LSH, English]

http://news.chosun.com/site/data/html_dir/2013/09/09/2013090900413.html

It is reported by a news media (Nocut News) that the government decided to open up the market to all rice imports starting from 2015.  Referring to what the National Assembly Research Service submitted to Democratic Party Shim Jae Kwon, the government reported that they would put an end to the delayed rice tariffication and open up the market.  The government had been contemplating whether to extend the deadline of import restrictions or to open the market.

The current decision was made in reaction to cope with the reduced price gap between and imported and domestic rice as well as the annual rising burden of the mandatory import volume.  According to the mandatory import volume re-negotiated in 2004, , what had been imports of 205,000 tons during 1988 to 1990, will increase to 409,000 tons the next year.  This also signifies 12% of all domestic rice consumption.  To make the matter worse, annual rice consumption per person is on constant decrease: year 1982 marked 130kg per person but last year, 2012 consumption was recorded below 70kg. To encounter this issue of oversupply and decreased consumption, experts in government and academia are together saying that opening of the rice market is an inevitable.

However, there also exist countering arguments to the plan.  That is, prospective Korea-China FTA may require low tariffs on rice imported from China.  Moreover, if the rice market is left open, it can pose as a negative influence on the process of putting rice as an exception criterion in Doha Development Agenda and FTA negotiations. 

In his interview, Jang Kyung Ho, Assistant Director of Korean Farming Policy Research Institute said, “other members of WTO are still maintaining status quo without having to carry on extra obligations ever since 2000 and 2004. This makes it justifiable for Korea to also remain the current status after 2015.”  Saenuri Party recommended the government to re-examine ideas of a target price for a floating subsidy and a markup on a fixed subsidy but the government has not put forth any proposals. 

Sales of Products from the Western Sea Rise while Products from Southern-Eastern Sea Looses Consumer Confidence [LSH, English]

http://www.hankyung.com/news/app/newsview.php?aid=2013090879931

Fear of radioactive contaminated products imported from Japan has mixed reaction from the domestic fish market. Mackerel and cutlass fish caught in the Southern and Eastern Sea are avoided by the consumers while thread herring and red crab caught in the Western Sea are considered  safe. The sales of thread herring and crab increased by 120.7% and 65.2% each. The only Japanese imported product that maintains its market presence is beer. Food safety awareness to has also increased attention by consumers  for European and African imported marine products and  resulted in increased profit from sales. Surprisingly, sales of lobster imported from America increased by 831.5%.