Overcoming Obstacles to the Canada-Korea Free Trade Agreement – The Beef Issue

Abstract

This paper reviews the WTO beef dispute between Canada and Korea against the background of the stalled bilateral negotiations towards a free trade agreement, the free trade agreement that Korea has signed with the United States, and importantly the resumption of Korean beef imports from the United States and the Korean public reaction thereto. The paper argues that, given the deep integration of North American beef production and the essentially identical nature of the Canadian and US cattle herds, farming practices and regulatory systems, once Korea opened up its beef market to imports from the United States pursuant to the US-Korea FTA (including beef and beef products from Canadian feeder cattle if they are fed in the United States for 100 days prior to slaughter), there were no plausible grounds to maintain the ban on imports directly from Canada. The WTO panel is likely to reach the same conclusion. The same reality of a deeply integrated North American beef production system and the similarity of the Canadian and US products means that the economic impacts of the ban on Korean beef production are relatively muted: by far the closest substitute in the Korean beef market for Canadian beef would be the imports from other countries, most notably the United States. Accordingly, there are not likely to be tangible benefits for Korea either on human health grounds or in terms of protection for its beef sector in maintaining the ban.

Keywords: Canada, Korea, WTO, trade dispute, beef

JEL Classification: F13