The Korean Embassy’s visit to Michigan provided a chance for officials to gain insight into new and existing investment opportunities between the US and Korea.
South Korea an Important Market for American Beef
South Korea has proven itself a more valuable and reliable trade partner for U.S. beef than ever before. In fact, despite the EU having almost 10 times more consumers, Koreans purchase and consume more U.S.-supplied beef and beef products than them.
According to a new EU agreement signed on August 2, 2019, the U.S. is now allowed to ship 18,500 metric tons of beef annually to the union, increasing to 35,000 metric tons by 2027, a deal worth nearly $420 million. Prior to this agreement, the EU put a restraint in place dating back more than 40 years on the production and sale of beef infused with hormones. After filing a case with the World Trade Organization, EU and U.S. negotiators reached a deal in 2009 that continued the ban on hormone-treated beef but that allowed for a quote of imported beef meeting EU requirements of 45,000 metric tons. It was expected that this amount would be provided by U.S. suppliers and ranchers; however, according to an analysis by the Korea Economic Institute, that quota was mostly filled by producers in other nations.
While this agreement is a significant move for American beef exporters, and in particular the U.S. ranching industry, South Korea continues to be a highly important export partner for American farmers and ranchers. While the EU imported nearly $13.5 billion in agricultural products from the U.S. in 2018, South Korea imported more than $8.3 billion that same year despite its far smaller population.
In the past, South Korea also had issues with imported beef from the U.S. as a result of bovine spongiform encephalopathy (BSE), more commonly known as mad cow disease. BSE is a transmissible, slowly progressive, degenerative and fatal disease affecting the central nervous system of adult cattle. After restricting the import of cattle from the U.S., those conditions were amended to allow boneless beef under the age of 30 months.
Today’s import levels approach $1.7 billion, and is expected to grow under the KORUS FTA agreement as tariffs disappear by 2027, further cementing the close and significant relationship as trading partners between the two nations.