April 11, 2009

 

South Korea, Canada to seek middle ground on beef trade issues

South Korea and Canada will try to find middle ground on the beef trade issue before it becomes a full-blown trade dispute, government representatives of the two countries said Friday (Apr 10).

 

The announcement came after Canada had filed a formal complaint with the World Trade Organisation (WTO) to get South Korea to lift its ban on Canadian beef, which has been kept out of the Korean market since May 2003.

 

Canada said South Korea has not taken steps to open its market, despite comprehensive scientific evidence supporting the safety of Canadian beef. Canada also complained about South Korea's Prevention of Livestock Epidemics Act that was passed last year, which can be used to block imports of beef and meat parts from cattle over 30 months and from countries with cases of mad cow disease reported within the past five years.

 

Trade Minister Stockwell Day stated that Canada was categorised as a "controlled bovine spongiform encephalopathy (BSE) risk" country in May 2007, by the World Organisation for Animal Health (OIE), which allows it to export most beef products, regardless of the age of the animal, as long as specific risk materials are removed.

 

But South Korea was concerned of Canada's high rate of reported mad cow disease cases, with its 15th case reported just November 2008. A South Korean lawmaker said that raises questions on Canada's ability to control its livestock, but the North American country had dismissed the issue by saying its meat processing system can prevent tainted meat from reaching the consumers.

 

Day noted that the US, which has the same status from the OIE, gained access to the South Korea market in June 2008, and he said he hoped any differences can be ironed out before the matter reaches the dispute settlement panel.

 

Yet South Korea's government still remembers the large national uproar caused when it agreed to lift its ban on US beef, involving numerous protests that plunged the government's popularity and led to the firing of several officials.

 

Private trade experts expect South Korea to face a tough battle if the issue goes to the WTO dispute settlement panel, as the country is not in a good position to keep out Canadian beef after allowing imports of US beef.

 

But if South Korea can find fault with Canada's BSE control process and by highlighting Canada's repeated BSE cases despite the controlled risk status, it could win a favourable verdict, a researcher said.

 

Even if South Korea loses the case in the WTO, it could still impose limits on meat cuts and animal age through talks with Canada, who might not want to anger the South Korean public which could hurt sales even if the market is opened, experts said.

 

Prior to the ban, South Korea was Canada's fourth-largest beef market, importing 16,400 tonnes of Canadian beef valued US$37.4 million.