US celebrates South Korea decision on beef
South Korea has opened a duty-free quota for imported beef, provoking a positive reaction from the US Meat Export Federation (USMEF).
It said South Korea is currently the leading market for US beef, in terms of value, with possible shipments of $3 billion in 2022.
It explained that rising food prices are a concern in South Korea, and that the government there has sought to ease the burden on consumers. Part of this effort is to open up a duty-free quota of 100,000 tonnes of imported beef, open to all eligible suppliers.
USMEF’s vice-president for economic analysis, Erin Borror, explained that this quota comprises 25,000 tonnes of chilled beef and 75,000 tonnes of frozen beef. The US is the Asian country’s largest supplier in both categories but captures an especially strong share (66%) of Korea’s chilled beef market.
The US, Australia, New Zealand and Canada all have free-trade agreements with South Korea, but tariffs still apply on imports of beef. In the case of the US, the tariff is currently 10.7%, compared to 16% for Australia and 18.6% for beef from Canada and New Zealand.
Beef imports from countries with which South Korea has no free-trade agreement, including Mexico and Uruguay, are subject to a tariff of 40%.
With the duty-free quota, the US will lose this advantage, but Ms Borror said it was still good news for US exporters.
She explained: “Our tariff is lower, but when we think about everyone going to zero, it’s still a win for the U.S. Yes, we lose our relative advantage, but a 10.7% tariff equates to about 70 cents per pound on chilled beef from the US. If you think about the cost savings, it’s a benefit for the importer and for the Korean consumer.”
