WTO Panel Faults Korea. s Beef Imports

August 2, 2000

A World Trade Organization panel has decided several parts of South Korea. s beef import regime and domestic support program are in violation of that country. s WTO obligations and should be conformed to Korea. s obligations. The United States had asked for a dispute settlement panel on April 15, 1999, after consultations with Korea failed to resolve a dispute.

The United States claimed Korea failed to fill its minimum import quotas in 1997 and 1998 as required under a bilateral agreement. Australia, Canada and New Zealand joined the consultations in March 1999 that failed to resolve the dispute. Korea may appeal the ruling, and an appellate decision likely would occur in late October. If the initial ruling is upheld, Korea would have to fully liberalize its beef trade by Jan. 1.

Among the panel. s findings:

. Korea. s separate retail system for beef treats imported beef less favorably than domestic beef;

--The record-keeping requirements for those who purchase imported beef are more stringent than the requirements for those who purchase domestic beef, and, therefore, create an unfair burden for importers;

-- The prohibition against cross-trading between end-users of the Simultaneous Buy/Sell (SBS) system is an unfair restriction in the commerce of imported beef;

--The labeling requirements imposed on beef imported through the SBS system that are not also imposed on domestic beef create an unfair burden for importers;

-- The Livestock Products Marketing Organization. s (LPMO) refusal to call for tenders between November 1997 and May 1998 created an unfair import restriction for imported beef;

--The LPMO. s calls for tenders based on grass-fed or grain-fed constitutes an unfair import restriction that discriminates by type of beef;

--Korea. s domestic support for beef in 1997 and 1998 was not correctly calculated, exceeded the deminimus level, and was improperly excluded from Korea. s total aggregate measure of support (AMS).