Minister sees hope in US-Korean trade dispute
that a proposed free trade agreement between the country and the US
will go ahead, despite further disagreements over agricultural
issues relating to the deal.
The setback could prove to be particularly detrimental to the South Korean food industry, which has become increasingly reliant on imported materials in recent years. Min Dong-seok told reporters after the latest round of talks today that despite the lack of common ground between the two parties, he was confident there would be some resolution. "There have been some gains made in the four days of talks, but key issues have yet to be fully resolved," he was quoted as saying in a report for the Yonhap news agency. "Those that have not been resolved will be referred to a ministerial-level meeting that will kick off next week in Seoul." Key to the talk's success will be the resolution of disputes regarding to the trade of grain and meat between the two nations. As such, US exports of beef have been a particularly sensitive issue following South Korea's decision to impose strict bans on the product over the last few years. The bans came into place in 2003, over concerns that the presence of bones in beef originating from the US could spark a BSE scare in the country's food chain. There has already been some previous success over the issue in 2006, with South Korea allowing imports of boneless beef sourced from US cattle under 30 months old into the country. Safety fears were further compounded last year however, when bones fragments were again found in a small number of meat shipments from the US. While there still appears to be some willingness in cooperating over meat safety, both countries remain fundamentally opposed over an agreement on rice. South Korea is adamant that rice should be kept separate from the free trade talks, due to its political and economic significance. While the US remains confident it can find some middle ground in these discussions, an unknown source linked to the talks suggests that the rice issue could yet act as a deal breaker for South Korean support in the deal. For all the differences between the countries, over agricultural trade though, US imports are becoming increasingly important to the South Korean food industry. A report published last year for the USDA's Foreign Agricultural Service, estimates that the country now imports 60 per cent to 70 per cent of its total agricultural needs. "U.S. suppliers have a strong opportunity to export raw materials and ingredients for food processing in South Korea," stated the report. "The country's food and beverage manufacturing and processing industry is a major user of imported raw materials, intermediate products, ingredients, and additives. "Imports are necessary because domestic production cannot meet demand." This demand is in part, being driven by growing consumer expenditure on food products. According to statistics by consumer analyst Euromonitor, South Korea is expected to spend €41bn on food products in 2007, from €39bn in 2006.