As the timing for the United States' "reciprocal tariff" imposition approaches in two weeks, South Korea's trade authorities are weighing the agricultural product cards they can bring to the negotiation table with the U.S. Currently, South Korea is under market opening pressure, not only for sensitive items like rice and beef but also for processed foods such as jerky and sausages. The government is also speeding up negotiations on import conditions for potatoes and peaches.
According to related government agencies on the 18th, Vietnam and Indonesia have successfully brought agricultural products to the negotiation table with the U.S. In this regard, our trade authorities are examining whether they can effectively use the expansion of agricultural market access as a card in negotiations with the U.S.
The discussions reportedly include ▲beef (aged over 30 months) ▲apples ▲potatoes ▲nectarines ▲beef processed products (jerky, sausages). Among these, beef and rice are considered sensitive items that require approval from the National Assembly. In contrast, potatoes and peaches fall under the 'quarantine stage' category, meaning they can be imported once intergovernmental condition negotiations are completed.
◇ If the beef age restriction is lifted, processed products will also be imported
Yeo Han-koo, the head of trade negotiations who has led tariff negotiations, noted on the 14th that "strategic judgment is necessary for agricultural products (market opening)," igniting controversy over the possible abolition of the U.S. import restriction on beef aged over 30 months, which has been identified as a non-tariff barrier. Some view that importing U.S. beef aged over 30 months would not significantly enhance competitiveness, while others express concern that opening the market to U.S. beef as well as beef over 30 months from other countries would inevitably severely impact the domestic livestock industry.
South Korea has applied age restrictions on U.S. beef imports since 2008. After the outbreak of mad cow disease in the U.S. in 2003, imports of U.S. beef were suspended, and during its resumption in 2008, large-scale protests led to the decision to allow imports only of beef from cattle under 30 months of age. As of last year, South Korea has emerged as the largest export destination for U.S. beef, indicating high domestic demand for American beef.
According to the government, if the age restriction on U.S. beef is lifted, the market for U.S. beef processed products such as hamburger patties, sausages, and jerky will also open up. Currently, the import of U.S. beef processed products is effectively halted due to difficulty in confirming the age of beef used as an ingredient. South Korea has demanded that U.S. companies clearly certify that they used beef from cattle under 30 months for exports of U.S. processed meat, but there have been no American companies satisfying this requirement to date. Analysis shows that if South Korea abolishes the age limit on beef imports, an additional revenue of $110 million to $175 million is expected in the U.S.
The Ministry of Agriculture, Food and Rural Affairs is concerned that if the age restriction on U.S. beef is lifted, it may face additional market opening pressures from other countries. As of now, the only countries restricted to exporting beef under 30 months due to the mad cow disease outbreak are the United States, Canada, the Netherlands, Denmark, France, and Ireland.
A representative from the Ministry of Agriculture, Food and Rural Affairs said, "While there is a viewpoint that the markets for Hanwoo and U.S. beef over 30 months do not overlap, one must consider additional opening pressures," adding, "When other five countries demand the abolition of the age restriction citing U.S. beef as an example, how can we refuse that?"
However, changes to the beef import conditions are classified as market opening measures under the Free Trade Agreement (FTA) and cannot be pursued without the National Assembly's consent. Since beef, rice, apples, and others involve not just simple quarantine but also market opening, they cannot be resolved through mere practical discussions.
Expanding rice imports is also a sensitive issue. Currently, South Korea applies a high tariff rate of 513% on all rice and allows imports of only 408,700 tons at a low tariff rate of 5%. This is known as the tariff rate quota (TRQ).
Of this, approximately 132,000 tons, or 32%, is allotted to the U.S. In order to increase the U.S. share within the TRQ, an agreement must be reached at the World Trade Organization (WTO) without opposition from other exporting countries. Additionally, granting separate additional quotas to the U.S. will require National Assembly consent under trade procedure laws.
While the government is trying to reduce rice production through amendments to the Grain Management Act, expanding imports from the U.S. may lead to a conflict with its policy direction. It is also a challenging task for the government, as it cannot escape backlash from farmers' groups.
◇ Potato 'stage 6' and peach 'stage 5'... Quarantine negotiations speed up
Currently, U.S. potatoes and nectarines are quickly progressing through the import procedures. Potatoes are allowed for import only from products produced in 22 out of the 50 U.S. states. The U.S. side has requested to include potatoes from an additional 11 inland states for a total of 33. Once the government accepts this, approximately 90% of U.S. potato production could enter the South Korean market after completing the quarantine procedures.
According to the government, U.S. potatoes are currently in the 'Import Risk Analysis (IRA)' process, specifically at stage 6, which is the 'drafting import quarantine conditions' stage. After completing the import risk analysis process, preliminary risk assessment, and pest and disease evaluation, both countries are currently drafting the import acceptance criteria. Once the import acceptance criteria for potatoes from the 11 states are announced (stage 7) and notified (stage 8), they can be immediately imported.
The situation is similar for U.S. nectarines. Nectarines have been prohibited from import until now, but they are currently progressing to the IRA stage 5, which is the 'drafting risk management plan' stage. The quarantine authorities of the Ministry of Agriculture, Food and Rural Affairs have also completed gathering opinions from experts and stakeholders regarding individual pest and disease risks for nectarines.
In contrast, another item the U.S. is requesting for import, apples, is still in the early quarantine stages. According to the Ministry of Agriculture, Food and Rural Affairs, U.S. apples are currently at IRA stage 2 (initiation of import risk analysis). After receiving the request from the exporting country in stage 1, it is at the level of reviewing the provided information from the counterpart and examining relevant pest and disease literature, indicating that actual imports will take a significant amount of time.
Recently, the agricultural sector has strongly opposed the possibility of additional opening of agricultural and livestock products in the trade negotiation process with the United States. Major agricultural organizations like the National Farmers' Association, Korea Agricultural and Livestock Alliance, and Livestock-Related Organizations Council held a joint press conference in front of the presidential office in Yongsan, Seoul, and clearly stated their opposition to the expansion of opening, emphasizing the need for the government to protect food sovereignty and citizens' health rights.
The National Farmers' Association pressured on the 14th, stating, "Do not sacrifice agriculture and fight against U.S. threats," warning that "if this is ignored, the public will respond with a second fight against the Korea-U.S. Free Trade Agreement (FTA) and second candlelight vigils over mad cow disease."