ROKG CLOSELY MONITORING TAIWAN RESTRICTIONS ON

C O N F I D E N T I A L SEOUL 000086 SIPDIS STATE PLEASE PASS TO USTR FOR CUTLER STATE PLEASE PASS TO DEPT OF AGRICULTURE E.O. 12958: DECL: 01/22/2025 TAGS: ETRD EAGR PREL JA TW KS SUBJECT: ROKG CLOSELY MONITORING TAIWAN RESTRICTIONS ON U.S. BEEF REF: TAIPEI 0001 Classified By: Economic Minister Counselor Gregory S. Burton. Reason: 1.4 (B) and (D). ¶1. (C) Summary: In order to avoid provoking ROK domestic reaction, the ROKG has adopted a deliberate low profile with respect to the Taiwan legislature's January 5 vote to amend its Food Sanitation Management Act to exclude certain cuts of U.S. beef. However, at a special session of the National Assembly's Committee on Agriculture and Marine Affairs, the Minister of Agriculture made clear that, should the U.S. agree to a more restrictive import regime in Taiwan, Korea would ask to renegotiate the U.S.-Korea beef protocol. The ROKG is carefully monitoring developments in Taiwan as well as the domestic Korean press. Korean media has thus far provided limited coverage of public calls by National Assembly opposition lawmakers to renegotiate the 2008 U.S.-Korea Beef Protocol. Senior ROKG officials are hopeful that a strong U.S. response against Taiwan will be forthcoming and that Taiwan will reverse the decision to exclude certain cuts of U.S. beef. End Summary. Korean Response -------------- ¶2. (SBU) On the heels of the news on January 6 that Taiwan's legislature had voted to amend its Food Sanitation Management Act to exclude certain cuts of U.S. beef (reftel),lawmakers from two ROK opposition parties -- the Democratic Party and the Democratic Labor Party -- issued calls for the ROKG to renegotiate the 2008 U.S.-Korea Beef Protocol along similar lines. These lawmakers point to a 2008 statement by then-Prime Minister, Han Seung-Soo, that if the United States negotiated a protocol with any country that was less stringent than the U.S.-Korea Beef Protocol, the ROKG would request renegotiation of the latter. On January 8, the Federation of Korean Farmers (FKF) added its voice to those of the lawmakers. NGOs that led the spring 2008 demonstrations against U.S. beef have been quiet so far. While the National Assembly is in recess until February 1, the Committee on Agriculture and Marine Affairs met in a special session on January 19 to address the current ROK outbreak of Foot and Mouth Disease and developments on beef. Democratic Labor Party representative Kang Gi-Gap introduced a draft amendment to the Livestock Epidemic Prevention Act to require new restrictions on beef imports. ¶3. (C) Given intense media coverage of a domestic political feud over the change in ROKG plans for an administrative city south of Seoul, ROK media have provided relatively limited coverage of the reactions to events in Taiwan and their implications for Korea. ROKG reaction has been low profile. Korea's Ministry of Agriculture (MIFAFF) issued a press release clarifying that Taiwan did not amend its beef protocol with the United States, but rather took "a unilateral prohibition" through its amendments to Taiwan's Food Sanitation Management Act. While somewhat helpful, the MIFAFF press release appears to leave the door open to a later request for renegotiation of the U.S.-Korea protocol. To date, the MIFAFF press release has received no Korean press coverage. However, on January 19 during questioning before the National Assembly Agriculture Committee, Agriculture Minister Chanh Tae-pyong made clear that, should the U.S. agree to a more restrictive import regime in Taiwan, Korea would ask to renegotiate the U.S.-Korea beef protocol. The only other public statement came on January 13, 2010, when MOFAT's Deputy Trade Minister Lee Hye-Min responded to media questioning as follows: "The beef protocol between Taiwan and the United States has not been changed. We are watching the situation closely." ¶4. (C) ECON M/C on January 15 discussed the issue with MOFAT Director General for Bilateral Trade, Ahn Chong-ghee. Ahn reiterated that the ROKG is closely monitoring developments following the Taiwanese legislature's vote to amend its Food Sanitation Management Act to exclude certain cuts of U.S. beef. Ahn stressed that the ROK's low-profile response has been very deliberate in order to avoid provoking further domestic reaction. The ROKG is watching to see whether the Taiwanese legislature's action is allowed to stand. He noted that the opposition politicians do not currently appear to have enough support to force action in the ROK National Assembly, but that this could change if Taiwan implements a more restrictive import regime for U.S. beef than is the case in Korea. Ahn stressed that a strong U.S. reaction against Taiwan could prevent such an outcome and would help deflate those forces in Korean society that wanted greater restrictions on U.S. beef imports. Ahn added that it would be even more damaging for the ROKG if similar developments were to take place in Japan. Korean Beef Market -------------- ¶5. (SBU) While developments on beef unfold in Taiwan, the market for U.S. beef in Korea has shown marked improvement. U.S. beef exports to Korea have picked up steam over the last few months as the Korean won has strengthened against the U.S. dollar and consumer attitudes toward U.S. beef have gradually begun to normalize. Even sales of higher value chilled beef have been rising, indicative of growing confidence among importers (since chilled beef is perishable and requires quick turnaround). Annual exports are on track to reach an estimated 50,000 tons in 2009. According to trade data through November, Korea is the fourth largest market for U.S. beef with sales totaling 45,000 tons, worth $180 million. In Korea, forecasters anticipate continuing appreciation of the Korean won and the Australian dollar against the U.S. dollar in 2010, which can be expected to give U.S. beef sales an additional boost. ¶6. (SBU) The U.S. Meat Export Federation (USMEF) in Seoul recently launched a new marketing campaign, known as the "Trust Campaign", to strengthen consumer confidence in U.S. beef. This four month-long campaign, which runs through April, includes cable television ads, signboards on buses, newspaper ads and in-store promotional activities. These activities have so far gone remarkably well. In fact, when discussing the campaign with the press, the local USMEF Director mentioned that she was confident that the U.S. market share would eventually return to the same levels as in ¶2003. ¶7. (SBU) For the first time since 2003, E-mart, the largest retailer of U.S. beef, on January 15 published a full-one page newspaper advertisement promoting U.S. beef as part of a one-week promotion of its sale of U.S. beef. Sales at E-mart during the promotion increased by approximately 700 percent and U.S. beef sales surpassed those of Australian beef. E-mart's action demonstrates the growing confidence that Korean retailers, hotels and restaurants now have in the quality of U.S. beef as they start to promote more extensively the use of U.S. beef in their establishments. Comment -------------- ¶8. (C) The ROKG's deliberate low public profile on the developments in Taiwan does not translate into lack of interest or concern. Rather, it is a strategy designed to avoid provoking forces in ROK society that oppose the ROKG and would wish to see a more restrictive import regime for U.S. beef. The ROKG is watching developments very closely and hopes that a strong U.S. reaction can reverse the action of Taiwan's legislature. The January 19 statement by the Agriculture Minister demonstrates clearly that it will be difficult for the ROKG to keep the issue low profile as opposition politicians seek to provoke public concern. The ROKG remains deeply concerned that public opinion could swing against the government if Taiwan implements a more restrictive import regime for U.S. beef than is the case in Korea and a weak U.S. response were to follow. STEPHENS