Cattle producers and exporters are applauding a government decision to take South Korea to the World Trade Organization over its continued refusal to allow Canadian beef imports.
The Canadian Beef Export Federation president predicted the WTO notification could encourage Korea to try to negotiate a limited-access deal. It may find that preferable to a two year dispute process that could result in an order to open the country to all Canadian beef.
“I think it’s possible they might come to the table to try to negotiate access for under 30 months rather than risk a WTO ruling opening it up completely,” said Gib Drury.
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“That’s what happened with the United States.”
In fact, the Korean agreement to cut a limited deal with the U.S. allowing, at least in theory, imports younger than 30 months sticks in the Canadian craw.
“Canadian beef meets all the requirements for full market access according to the World Organization for Animal Health (OIE) yet Korea has continuously stalled restoration of Canada’s access,” Canadian Cattlemen’s Association president Brad Wildeman said in a statement praising the government’s April 9 announcement.
“Particularly galling with Korea’s ongoing border closure is the fact that they accept beef from the U.S., which shares the same OIE status as Canada.”
Trade minister Stockwell Day and agriculture minister Gerry Ritz announced that Canada is asking Korea for consultations through the WTO to try to resolve outstanding issues. Failure to do that within 60 days would lead to a Canadian call for the issue to go to a dispute settlement panel.
Without a prior political settlement, the WTO process could drag on for as long as two years.
“I don’t think this will be sufficient in the short term, but it shows Korea that we are serious about getting access and that may spark something,” Drury said.
Toronto trade lawyer Lawrence Herman of the law firm Cassels Brock and Blackwell agreed.
“I do think it will affect the negotiations,” he said. “It will give Canada some leverage and it will put some pressure on the Koreans to make some movement, perhaps in the free trade talks.”
Canada has told Korea that a free trade agreement between the two will not be signed until beef access is included.
Before Korea joined the world in 2003 in blocking Canadian beef because of BSE, it was Canada’s fourth largest beef export market with 2002 sales of $50 million.
Since then, more than 55 countries have opened their borders to at least some imports from Canada.
In a statement announcing the WTO move, Ritz said Canada will remain firm but respectful. After a recent quick trade mission to South Korea, Ritz issued an ultimatum of movement by March 31 or else and told reporters the Koreans would lose face if they did not live up to their trade obligations.
“We are committed to a respectful working relationship with South Korea but we have always made it clear that it is unacceptable to discriminate against Canadian producers,” he said in an April 9 statement.
“This consultation is a formal opportunity for us to work with South Korea to resolve this issue as well as a strong signal that we will stand up for Canadian producers.”
However, Drury cautioned that getting formal access is not the same as getting practical access to the Korean market.
Just ask the Americans.
In June 2008, South Korea granted access to American beef from cattle younger than 30 months. A significant volume was shipped.
However, consumers have resisted, Drury said, and the government now requires stores and restaurants serving American beef to post a sign outside indicating they serve foreign beef.
“That is, to say the least, a deterrent for customers going in,” Drury said. “American sales have been reduced to a trickle.”
Warehouses are full because of the decline of consumer purchases, and new export opportunities are scarce.
