South Korea is currently the largest value market for U.S. beef exports as shipments are on pace to possibly reach $3 billion in 2022. However, rising food prices are a growing concern in Korea, which is causing the government to take steps to try to ease the burden on consumers. Part of that effort is Korea?s recent opening of a 100,000 metric ton duty-free quota on imported beef, open to all eligible suppliers. U.S. Meat Export Federation (USMEF) Vice President for Economic Analysis Erin Borror explains that the quota includes 25,000 mt of chilled beef and 75,000 mt of frozen beef- two categories in which the United States is the largest supplier.
Under the Korea-U.S. Free Trade Agreement (KORUS), U.S. beef has a tariff rate advantage over major competitors in Korea. All major beef suppliers will eventually reach zero duty, but the U.S. has a head start because KORUS entered into force earlier than other free trade agreements (FTA). For example, U.S. beef is currently tariffed at 10.7%, Australian beef at 16% and New Zealand and Canadian beef at 18.6%. Suppliers with no FTA, such as Mexico and Uruguay, are subject to a 40% tariff. Borror noted that, while the duty-free quota will temporarily eliminate U.S. beef?s tariff advantage, the U.S. industry will benefit significantly because of its position as Korea?s largest supplier.
Through June, U.S. beef exports to Korea are on a record pace at $1.52 billion, while global exports reached $6.19 billion. A detailed summary of January-June exports of U.S. beef, pork, and lamb is available from the USMEF website.
