U.S. ponders retaliatory measures
by Larry Aylward, managing editor
Meat industry trade groups are fiery over South Korea's import quotas on frozen and chilled beef and frozen pork, which they say has distorted product production, supply and demand patterns.
The Meat Industry Trade Policy Council insists that South Korean import barriers on U.S. red meat exports "are among the most severe of any industrialized nation or trading bloc."
But South Korean officials say their actions are "appropriate."
MITPC made the claim in a letter to the Office of the U.S. Trade Representative, which requested comments in the Federal Register on trade barriers recently instituted by South Korea. The MITPC consists of AMI, the National Pork Producers Council, U.S. Meat Export Federation, National Cattlemen's Association, American Farm Bureau Federation and the American Sheep Industry Association.
"Despite consumer acceptance of imported product and strong domestic demand, imports of frozen and chilled beef and frozen pork are subject to restrictive import quotas and state purchasing arrangements," according to the letter.
Earlier this year, U.S. sausages valued at more than $1 million were seized on the docks of Pusan, a South Korean port city. MITPC claims South Korean officials instituted a non-tariff barrier on sausage imports. Much of the product was disposed of at a loss and some was re-exported.
"Without prior notification to importers or to the U.S. government, South Korea began reclassification of a previously unenforced food code regulation which has halted the trade of frozen, cooked U.S. sausages," MITPC said in the letter.
MITPC claimed the code regulation is a scientifically outdated requirement that assigns a longer shelf life to non-heat-treated meat products than to heated products. The reclassification prohibits the import and sale of products more than 30 days old, rather than 90 days, the previous standard.
"The 30-day period is less than the time required to process, transport and distribute these products," MITPC's letter said. "Although U.S. meat and food supervisory agencies do not publish instructions on shelf life, the shelf life for properly handled frozen, cooked sausages is conservatively estimated at three to six months."
The South Korean government says it was forced to reclassify the meat as heat-treated chilled sausages with a regulatory shelf life of 30 days because of safety standards. A member of South Korea's Ministry of Health and Social Affairs told the Wall Street Journal that the seizure was "not a matter of reclassification." The government took corrective measures, which were quite appropriate, the source added.
The South Korean market for imports of fresh chilled pork and beef was liberalized on Jan. 1. But MITPC contends that no trade has started because of the enforcement of scientifically unfounded South Korean shelf life requirements.
"The shelf life for chilled pork and beef is only 10 days under this requirement," MITPC claimed. "The regulation is based on trade in 'hot' carcasses and cuts, not on vacuum-packed cuts which define today's international standard."
MITPC will recommend to President Clinton that the United States utilize the Super 301 trade law if South Korean trade officials refuse to "come to the table," says Al Tank, vice president of public policy and trade for the National Pork Producers Council.
The Super 301 trade law authorizes the United States to deal with unfair trade barriers and countries that have a pattern of trade abuses.
"The South Koreans fit [the pattern] to a tee," Tank adds. "The president must make a decision by Sept. 30 to put [South Korea] on a 'watch' list. Once a country is on a 'watch' list, retaliatory measures can be taken."
Tank called Super 301 a "great leveling tool."
Other U.S. industries are also facing barriers to access of the South Korean market.
Dianne Wildman, a trade representative spokeswoman, claims that exporters of more than 60 agricultural products have encountered problems. She says the trade office has received about 35 letters.
But Wildman points out that talk of utilizing the Super 301 trade law is premature. She says a letter, stating U.S. exporters' concerns, was sent to South Korean officials by the U.S. trade office in July. The letter will be followed by negotiations, initiated by the United States.
"This is a legal procedure," Wildman says. "(It has not been proven) that any law has been broken."
Philip Seng, president of the U.S. Meat Export Federation, claims the reason behind the reclassification is that South Korean sausage and ham producers realize they're losing business to U.S. exporters.
U.S. exports of sausages climbed to $4.1 million in 1992 and $5.9 million in 1993 after import rules were liberalized in 1991, according to MITPC. Exports in 1994 are expected to show continued growth.
"In our opinion, it's not an issue of health, safety and food sanitation," Seng says. "It's a way of using a non-tariff trade barrier that precludes us from exporting to that market. Where is the impetus behind this movement?"
Tank says: "Domestic processors in South Korea watched imports rise rapidly. Given the nature of the political system, they can be powerful and influence government to restrict trade."
In June, the European Union announced it would support the United States in its protest. Canada, Australia and Argentina also oppose South Korea's policy change.
U.S. sanctions against South Korea could include higher tariffs on automobiles or any other products imported from the country, Seng notes.
"We've contacted the South Korean embassy," Seng adds. "[Officials there] have been staunch, but they're concerned about being cited as a violator of free trade."
Seng admits South Korea has potential to be a "boom market" for U.S. exports well into the 21st century.
"It's important to address these problems now," he stresses.
But the export problems may never go away, according to Marvin Walter, president of Ames, Iowa-based Carriage House Meats.
"[Non-tariff trade barriers] will be an ongoing problem that [the industry] will have to deal with," he says.
Walter suggests that meat packers devote only one-fifth of their total time, effort and business to exporting.
"While exports can be good, they can also be a real thorn in the side," he adds.
"[Non-tariff trade barriers] are not only going on in South Korea, but all over the world. Any [packer] that devotes more than 20 percent of his total business to the export market is making a mistake.