US Beef vs. the Economy: Korea Savors the FTA While We Continue to Fight About US Beef

On Mar. 14, just one day before the U.S.-Republic of Korea Free Trade Agreement entered into force, Korea’s largest newspaper, Chosun Ilbo, came out with an editorial titled “Korea-U.S. FTA, Korea’s Gateway to Opportunities.” The story was based on three grounds:

First, there are currently more than 300 regional trade agreements in the world, with FTAs taking up more than 50 percent of global trade. Thus, nearly all important economic powers are hoping to use FTAs to make breakthroughs in economic growth.

Second, South Korea has a limited domestic market that depends almost exclusively on foreign trade. To enhance the competitiveness of domestic enterprises and to create more employment opportunities, South Korea must sign more FTAs in order to expand their own economic territories.

Third, Korea shouldn’t give up the opportunity for fear of potential risks. The government must react with effective countermeasures to strengthen industries that may face increased risks due to the FTA.

The article made this final appeal: The ruling and opposition parties should stop discussing the abolition of the FTA, which serves only to make South Korea an anomaly in the eyes of the world. They should instead make every effort to embrace the U.S.-Korea FTA and make it the cornerstone for gradually opening the gateways of opportunity to the Korean economy.

After the initial three-month trial period, has the U.S.-Korea FTA brought gateways of opportunity to the Korean economy? According to statistics provided by Korea’s Ministry of Knowledge Economy, since the second quarter of this year, Korea’s exports to the U.S. have seen a substantial increase of 28 percent. Korea’s Chamber of Commerce and Industry has also surveyed 600 Korean companies and found that nearly 60 percent of the companies gained positive benefits from the U.S.-Korea FTA. Since the U.S.-Korea FTA entered into force, tariffs on South Korean exports to the U.S. have dropped significantly; this has also caused a big tide of returns from South Korean enterprises with factories abroad.

The Korean economy is the biggest beneficiary of the U.S.-Korea FTA. The signing of the Korea-U.S. FTA has tapped into the breakthrough point of the Korean economy. This has made Korea the only nation in the world to have an FTA with both the EU and the U.S, putting the world economic spotlight on Korea.

Yet the U.S.-Korea FTA was not a triumph made overnight but, rather, was made in exchange for U.S. beef imports. The Korean government cleverly used the import of U.S. beef as a window of opportunity for future economic growth.

The ruling and opposition parties in Taiwan will soon to vote on the issue of U.S. beef imports. Judging from Korea’s experience, Korea had to endure the harsh test of U.S. beef imports before it eventually savored the fruits of the U.S.-Korea FTA. Taiwan thus also has to jump over the hurdle of U.S. beef imports before opening Trade and Investment Framework Agreement consultations and negotiations.

From July 2008 — when U.S. beef first was imported into South Korea — to the present, there have been no recorded cases of mad cow disease resulting from U.S. beef consumption in Korea. In fact, there has been an observed increase in demand for U.S. beef, indicating that as long as the government fulfills its duty in implementing the control and quarantine of U.S. beef, it can strike a balance between maintaining relations with the U.S. and the health of its citizens.

South Korea is our country’s most prominent competitor in the overseas market; seeing South Korean companies’ burgeoning dominance in the global market, we realize that our time is running out. We sincerely hope to end the ruling and opposition parties’ battle over U.S. beef, which will give Taiwan a key to open the gateway to economic opportunities.