U.S. Trade Representative report outlines beefs

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U.S. Trade Representative report outlines beefs

The U.S. government said it will continue to pressure the Korean government to fully open its beef market, according to an annual report by the United States Trade Representative published yesterday, local time.

“The U.S. will continue to urge Korea to open its market fully to U.S. beef and beef products based on science, the OIE (World Organization for Animal Health) guidelines and the United States’ risk status,” said a report on sanitary and phytosanitary measures.

The office of the trade representative publishes its National Trade Estimate Report every year, along with two separate reports on sanitary and phytosanitary (SPS) measures, and technical barriers to trade (TBT) to assess the conditions of its major trade partners.

After the mad cow disease crisis that swept Korea with massive candlelight vigils against U.S. beef imports in 2008, Korean importers bring in U.S. beef and beef products only from animals less than 30 months of age as a transitional measure until consumer confidence improves.

The report said the United States exported $582 million worth of beef to Korea last year, making Korea the fourth-largest export market for U.S. beef.

The U.S. government has long been hinting at renegotiating the beef issue.

The Park Geun-hye government also is considering that its first FTA-related negotiation with the United States will likely involve the beef issue.

In the National Trade Estimate report, the USTR said there are desirable improvements in reforming trade barriers in Korea since implementation of the free trade agreement a year ago, but there problems regarding government regulations remain.

The trade organization said the Korean government lacks transparency in imposing taxes on foreign businesses that make investments in the country.

“Some U.S. investors have raised concerns about a lack of transparency in investment-related regulatory decisions, including by tax authorities, highlighting concerns about possible discrimination,” the report said.

“The Korus FTA includes a wide range of provisions across all chapters to improve regulatory transparency in Korea. The U.S. will monitor compliance with transparency-related Korus commitments.”

According to the report, Korea has taken reforms that eliminated or raised ceilings on aggregate total foreign equity ownership, including ownership of individuals and corporations. Despite the reform efforts, the country maintains important restrictions on foreign investments, including those on telecommunications operators, the report said.

Korea currently has a 49 percent limit on foreign shareholdings of facilities-based telecommunications operators. This restriction will be lifted in March 2014.

The country also prohibits foreign investment in rice and barley farming, the report said. It limits foreign equity ownership to 50 percent on meat wholesaling.

In the TBT report, the USTR made a positive assessment that the U.S. and Korean governments have been resolving a number of trade barrier issues, such as avoiding duplicative electrical safety testing and the adoption of the latest international standard for electronics devices.

As for cosmetics, the USTR raised a concern that U.S. companies are likely to encounter a considerable financial burden if the bill is passed, if a bill that requires labeling for all packaging of all cosmetics products, proposed last year, is enacted into law.

By Song Su-hyun [ssh@joongang.co.kr]
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