Following weeks of political turmoil and anti-government protests in South Korea and recent trade negotiations with the United States that yielded minor U.S. concessions, South Korea seems poised to resume importing U.S. beef.
But the minor concessions on beef could further complicate the United States-Korea Free Trade Agreement. Although negotiations were concluded a year ago, the pact has not yet been submitted for approval by Congress, which has become bogged down on the free-trade agreement with Colombia.
The free-trade agreement with South Korea, America’s seventh-largest trading partner, would eliminate South Korea’s 7 percent tariff on industrial goods, immediately eliminate tariffs on more than half of current agriculture exports and reduce non-tariff barriers.
But the free-trade pact was already hobbled in Congress by disputes over its manufacturing provisions, and the two-month battle over beef occurred as time was running out for the Bush administration.
Meanwhile, South Korean activists vow to continue their protests until the government agrees to “completely renegotiate” an April beef-import agreement with the United States that precipitated their street rallies.
In December, Lee Myung-bak, a pro-America conservative, won a landslide victory in South Korea’s presidential election. His platform included pledges to improve ties with Washington and to reinvigorate the South Korean economy, in part by obtaining congressional approval of the free-trade agreement.
On April 18, the day before Mr. Lee became his country’s first leader to visit the U.S. presidential retreat at Camp David, South Korea and the United States appeared to have resolved their trade dispute, which erupted in December 2003 when South Korea terminated beef imports after the first case of mad cow disease was discovered in the United States.
The April 18 agreement would “reopen the Korean market to all U.S. beef products, from cattle of all ages,” according to a statement issued that day by U.S. Trade Representative Susan C. Schwab. Protests in South Korea began a couple of weeks later, culminating in offers by the South Korean Cabinet to resign.
On June 20, the day before U.S. negotiators confirmed a “commercial understanding” that revised the April 18 agreement, Mr. Lee accepted the resignation of his chief of staff and several other high-level advisers.
The June 21 agreement stipulated that “only U.S. beef from cattle under 30-months of age will be shipped to Korea, as a transitional measure,” Ms. Schwab said.
But the free-trade agreement (FTA) is still in trouble. “The problem with this FTA has always been broader than beef - it’s the agreement’s basic acquiescence to Korea’s one-way street in manufacturing trade that is unacceptable,” said Rep. Sander M. Levin, Michigan Democrat who heads the House Ways and Means subcommittee on trade.
Said Senate Finance Committee Chairman Max Baucus, Montana Democrat, “I’ve been very clear that Korea should accept imports of all U.S. beef, whether it’s bone-in or boneless, regardless of the age of the cattle, and international scientific standards say I’m right.”
Chances for approving the U.S.-Korea Free Trade Agreement before the end of the Bush administration are “fading fast,” said Jeffrey Schott, senior fellow at the Peterson Institute for International Economics. The beef dispute over the age of the cattle, which “involved a very small share of total U.S. shipments to South Korea, has soured the climate for getting a compromise,” Mr. Schott said.
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