Beef Trade Not Part of U.S.-Korea FTA Renegotiations

Details of changes to the U.S.-Korea Free Trade Agreement (FTA) were unveiled late Friday by both countries, with shifts on auto provisions in the original deal but no changes relative to beef trade provisions of the pact negotiated in 2007.

The U.S. will phase out a 2.5% tariff on South Korea-made vehicles over five years instead of the immediate drop that was contained in the original pact. Korea would also have to eliminate its 10% tariff on American-made trucks. Korea would immediately cut its tariff on U.S. auto imports in half, to 4%.

The agreement includes a safeguard provision for autos, that would allow tariffs to be reimposed if there were a sudden, unanticipated surge in South Korean auto imports as a consequence of the agreement.

But ag interests are focusing in on the beef portion of the deal, in that no changes were made. South Korea's trade minister kept insisting before and during last week's U.S.-based talks that beef was not on the agenda for the negotiations.

That development saw Senate Finance Chairman Max Baucus (D-Mont.) expressing concern about he package and he has so far withheld his support for the deal. South Korea continues to limit American imports to beef from cattle under 30 months old, a restriction that Baucus and other U.S. officials consider unreasonable because no BSE in humans has been attributed to American beef.

While no shifts in the beef components of the FTA were made, groups like the National Pork Producers Council (NPPC) welcomed the package as it will help their access to what has been a growing market. "To get a final agreement, we needed to give a little, we needed to take one for the team," NPPC president Sam Carney said. "This is still a good deal for us."

Now the focus will be on whether the administration can convince lawmakers to go along with the deal. Action is expected in 2011 on the pact, which if approved by both legislatures, would take effect in July 2011. Expectations are some kind of action will be needed on beef before lawmakers like Sen. Baucus and others will give their support to the deal, like via some kind of memorandum of understanding that would be at the side of the FTA plan.

Here's a link to USDA Sec. Tom Vilsack's statement on the package.

Here's a link to the USTR website with links to fact sheets on the pact.