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US Beef Industry Warns Against Korea FTA Changes

by Mary Swire, Tax-News.com, Hong Kong

31 July 2017


The US beef industry has argued against changes to the Korea-US Free Trade Agreement, arguing that US beef exporters have thrived under the deal.

The US Government has confirmed a special session to be held in Washington DC in August to discuss potential changes to KORUS, which US President Donald Trump in April 2017 called a "one-way street" and "a horrible deal… that should've never been made."

The US currently runs a USD27.7bn trade deficit with South Korea, the country's sixth-largest goods trading partner, according to the Office of the US Trade Representative.

The National Cattlemen's Beef Association, the North American Meat Institute, and the US Meat Export Federation sent a joint letter to US Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue on June 27 supporting the current agreement.

"Simply put, KORUS created the ideal environment for the US beef industry to thrive in South Korea," said the letter. "We would not support any changes in the terms of the KORUS that would jeopardize either our market share or the significant investment that has been made in rebuilding Korean consumer confidence in the safety, quality, and consistency of US beef."

The US exports around 10 percent of its beef, with about 75 percent going to Japan, South Korea, Mexico, or Canada. Under KORUS, the industry has seen an 82 percent increase in annual sales to South Korea, from USD582m in 2012 to USD1.06bn in 2016, making it the second-largest export market for US beef. The current agreement allows for a reduction in Korean taxes on US beef of 2.7 percent per year. By 2026, duties will have fallen to zero percent, from 40 percent.

TAGS: environment | tax | investment | Australia | Mexico | Canada | Korea, South | trade | Japan | North America

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