April 21, 2009

South Korea may have reopened its market to the US, but the Asian country's policy to import US beef only from cattle less than 30 months old is still an obstacle to overcome.

The trade situation remains sensitive to both sides and requires close and careful observation, said experts.

Both sides are closely watching the developments of US beef consumption in South Korea, said Hong Young-ki, director for the North America and European Union Trade Division at the Ministry of Foreign Affairs and Trade.

South Korea agreed last year it would lift the age limit once the negative public sentiment has dissipated. There are lingering public concerns that US beef would bring in the mad cow disease into South Korea, although the fears have somewhat subsided.

The fears have not completely disappeared but the steady improvement in US beef consumption is a huge improvement, considering the fierce public response to the reopening of the market last year, according to Suh Jin-kyo, an economist and agricultural industry expert.

Suh said lifting the age limit would need some time, but the beef row with Canada could accelerate the process.

Canada this month said it would consult the WTO on South Korea's continued ban of its beef over mad cow disease despite its "Controlled BSE Risk" status, citing violation of international trade rules. But South Korea is deeply concerned over Canada's repeated failure to prevent BSE cases, the latest of which occurred in November 2008.

Suh said the US could be waiting for the outcome of the beef row between Canada and South Korea before seeking the resumption of imports of beef from cattle over 30 months old.

But Suh said it would be best if South Korea avoids going to the WTO because it could raise more issues, so it is likely that Seoul and Ottawa will seek a compromise on the dispute soon.