The April beef protocol between the U.S. and Korean governments is clear in its intent. The first sentence of the USDA fact sheet stated, “The United States and Korea concluded an agreement on April 18, 2008 to fully reopen South Korea’s market to all U.S. beef and beef products consistent with international standards and the World Organization for Animal Health (OIE) guidelines.” All beef imported from the U.S. would be regulated on international standards and the OIE guidelines. Certain “specified risk materials” associated with BSE would be removed from cattle of all ages while other materials removed only from cattle over 30 months of age. Interim measures allowed the Korean government to audit or reject U.S. decisions on which beef plants could ship to Korea and notations on boxes of T-bone and Porterhouse steaks that the products came from animals under 30 months of age. Korea was to become the 63rd country to recognize the equivalence of the U.S. meat inspection system and join 15 other countries that had accepted U.S. beef based on OIE-consistent import requirements.
Accepting the protocol was a significant risk for the new Korean government and closely watched by Japan, Taiwan, China and other Pacific Rim countries that have not allowed imports based on the OIE guidelines. The U.S. government pushed hard for complete acceptance of the OIE guidelines in the belief that science-based rules were the only way to prevent a precedent of countries picking and choosing which OIE guidelines to use.
Korea opened its beef market to more trade in 2001 in response to a WTO Beef Dispute Panel Report, but was allowed to maintain a 40 percent tariff on muscle meat and 18-27 percent on offal. Despite these tariffs, Korea quickly became the third largest U.S. market for muscle meat and the fourth market for U.S. offal. Imports now account for 60 percent of Korean beef consumption with Australia supplying about 70 percent of the imports. Korean beef production in 2008 is up 5 percent from 2007. Per capital beef consumption in 2007 was 16.5 pounds, down from 17.8 pounds in 2003, and less than a fourth of the U.S. at 67.1 pounds. Under the U.S.-Korea Free Trade Agreement (FTA), tariffs would decline over 15 years in equal installments. With the proven demand for U.S. beef, sanitary and phyto-sanitary regulations are the only pretexts available to Korean beef producers to demand the Korean government restrict U.S. beef imports.
A protocol between two governments on regulations of beef imports, or the imports of any other product, does not require consumers in a country to actually buy products they do not want to eat. Market demand for U.S. beef before December 2003 proved that it meets the diets and tastes of many Koreans. The safety of U.S. beef was not an issue before the discovery of BSE. Based on media reports, Korean consumers do not appear to have health or safety concerns now with beef from animals less than 30 months old. There were no age restrictions prior to 2003 and most beef shipped to South Korea was from cattle under 30 months. Five U.S. packers have previously announced a voluntary age labeling program for 120 days for beef being shipped to South Korea to address safety concerns.
In a consumer driven market the solution is to allow consumers to choose what they want to buy. Government approval does not mean that all consumers will have the same view of food safety. This has been evident in the U.S. with debates over the benefits of organic products, concerns about biotech crops and the labeling of milk from cows that received a hormone that has no impact on the quality or safety of milk. These issues are going to continue to grow in importance in all countries where consumers have enough income to afford to differentiate products in the marketplace.
Trying to pretend the issue doesn’t exist in Korea or that it can be easily swept under the rug will not resolve it. And, Korea is not unique. Japanese consumers are equally or more concerned about food safety, and the Japanese government has been watching the situation in Korea to learn from that experience. The EU is well known for consumer concerns about biotech crops, hormones in beef and use of chlorine on poultry meat.
The ultimate issue is how to divide between governments and individuals the responsibility for human health and safety as it relates to food products. The WTO and other international agencies like the OIE take a science-based approach to government import regulations. The authority of governments to restrict imports of products that are suspected of being unsafe is not at issue. A consensus has developed that import restrictions based on something other than science is not good for consumers or producers. They raise costs for consumers and protect high cost producers to the detriment of lower cost producers. While governments should focus on the science of food safety, consumers have the right to base their food choices on individual criteria that may or may not be science based.
The Korean beef market is expected to continue to grow. USDA’s outlook to 2017 released in February showed beef imports (not including variety meats) of 430,000 metric tons (MT) up 115,000 MT, 36 percent, from 2007. That assumed the U.S.-Korea FTA does not become effective. It will be a bigger market with the FTA, and U.S. producers want to maximize access in the market. The final outcome of the U.S.-Korea beef protocol will break new ground, and other countries will take their cues from it. A new framework for import regulatory policies and consumer decision making is unfolding.