Saturday, August 05, 2006

US ROK FTA - Ag Sector Impact

A government think tank and the Ministry of Agriculture and Fisheries announced in a study that predicts about a $2 billion impact per year on the Korean agricultural sector. No mention of the methodologies, so I cannot comment to much on that number. Perhaps the notable thing about this article is this quote:

Facing a possible 2-trillion won output reduction, worth 6 percent of Korea's total agricultural production...

Lets put that another way the FTA will only effect 6% of Korea's Agricultural sector, or better 94% will be untouched. Once again the government does its best to shoot themselves in the foot in selling the FTA.

Once again confirming my inclination that the reason why its so expensive to live in Korea is the trade restrictions is this from the article:

According to a research paper by Choi Se-gyun, senior researcher at the Korea Rural Economic Institute, the price of domestic beef will decline 8.7 percent and total production will shrink by 362.9 billion won a year if the current 40-percent tariff on U.S. beef is removed.

Forty percent! OUCH! Again lets put this factoid another way, BECAUSE OF THE TARIFF, DOMESTIC BEEF IS 8.7% MORE THAN IT SHOULD BE!

The article goes on to give the ROK's negotiation position on all this:

The Korean government will try to exclude rice, beef, chili peppers and 30 other major farming products from the trade pact.

Geez! What's the point of a FTA if Korea demands such broad restrictions?

Final thought, the article is entitled "Could Free Trade Tariffs Take the Bite Out of Farming?". What the heck is a "Free Trade Tariff". You know with things like this it makes me wonder if Korea (government and people) can understand the two simple words "Free Trade".


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