The chief executive officers of the National Cattlemen's Beef Assn. (NCBA) the North American Meat Institute (NAMI) and the U.S. Meat Export Federation (USMEF) sent a letter on Thursday to Agriculture Secretary Sonny Perdue and U.S. Trade Representative Ambassador Robert Lighthizer to highlight the success the U.S. beef industry has experienced with its exports to South Korea since the entry into force of the Korea-U.S. Free Trade Agreement (KORUS).
The industry letter was prompted by the recent announcement from the Trump Administration that there will be a special session with South Korea to discuss potential changes to the KORUS agreement. The meeting will be held in Washington, D.C., in August.
South Korea requested that the Trump administration postpone any review of KORUS until its new trade minister is appointed. The request comes after Lighthizer requested a review of the agreement in a July 12 letter to Korea’s former minister of trade. In response, South Korea suggested that both sides “objectively examine, analyze and assess the effects” of KORUS before this meeting takes place. Based on the trade agreement, the two countries must meet within 30 days of the initial request, or by Aug. 11.
"Simply put, KORUS created the ideal environment for the U.S. beef industry to thrive in South Korea," the letter said. "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 U.S. beef."
Together, NCBA, NAMI and USMEF represent the entire beef value chain, from ranchers to feedlot operators to meat packers and export trading companies, and they are united in the position that continued access to the South Korean market on the terms that were negotiated in the KORUS deal is essential to the future health of the U.S. beef industry.
The letter states, “Under KORUS, the U.S. beef industry has seen an 82% increase in annual sales to South Korea -- from $582 million in 2012 to $1.06 billion in 2016 -- making South Korea the second-largest export market for U.S. beef. Many cuts like short ribs and chuck rolls receive a significant premium in South Korea over prices in the U.S. market. KORUS established strong, science-based trade measures and a schedule for the elimination of South Korea’s 40% tariff on U.S. beef -- terms that have allowed the U.S. beef industry to be very competitive in South Korea.”
The letter further states that implementing the KORUS deal before Australia implemented its own free trade agreement with South Korea "has given U.S. beef a significant tariff rate advantage in South Korea, and the United States is now the leading source of beef imports in South Korea.”
The beef industry is a vitally important part of the U.S. agricultural economy and one of the largest employers in rural communities across the U.S. Exports are a critical component of the continued profitability of the U.S. beef industry and make a significant contribution to the positive balance of trade that the U.S. enjoys in food and agricultural products. Last year, the U.S. sold $6.3 billion of beef to foreign consumers, with exports to South Korea accounting for 17% of the total.