Trade and Environment Dimensions in the Food and Food Processing Industries in S. Korea (Sub regional workshop on the Trade and Environment)

Transcription

1 Trade and Environment Dimensions in the Food and Food Processing Industries in S. Korea (Sub regional workshop on the Trade and Environment) Il Chyun Kwak, Ph.D Professor of Environmental Policy, Kyungwon University Korea Contents Agricultural Trade in Korea Consumption of Food in Korea Securing Public Trust in Food Trade Trade of GMOs Environmentally Friendly Agriculture Korean Agro-Fishery Trade Corporation Recommendations 1

2 Agricultural Trade Export of agricultural, forestry and fishery products in 2003 is composed of agriculture 52.3% and fishery 37.7%. The major exports were vegetable and tobacco. Pork was also one of the major export items but its export fell greatly due to total discontinuation of export caused by the outbreak of foot-andmouth disease in Recently, overall trade balance has greatly improved. However, agricultural and fishery products are still the major items making a deficit in trade balance due to expansion of open market policy for agricultural and fishery imports. Agricultural trade In regard to import of agricultural, forestry and fishery products in 2003, agricultural products accounted for 50.9%, and the rest was shared by livestock and poultry, forestry and fishery products in similar level. Major imports were corn, flour, bean, beef, material lumber, croakers and scabbard fish. Japan is one of the major countries for our export of agricultural, forestry and fishery products. U.S. is the top importing target of Korea followed by China, Australia and Indonesia. Recently, import of agricultural products from China is on the rise on a large scale.u.s. and China are the countries where Korea makes a big trade deficit with agricultural, forestry and fishery products. The total number of agricultural and livestock import items is 11,261, and of them, 11,245 items are subject to automatic approval for import meaning that the import liberalization rate is 99.9%. 2

3 Consumption of food in S. Korea Recently, Korea has seen rapid changes in the environment surrounding agriculture and rural communities of Korea. At home, increased consumer awareness for food safety and health, also referred to as "well-being," has brought about diversified consumer demands, forcing those other than high quality, safe agricultural products out of the market. Adding to these drastic changes are the continuous drop in rural population and accelerated trend of rural aging, where social demands to narrow widening urban-rural income and welfare gaps are heightening. As for food crops as a whole, consumption is declining. It doesn t mean that food consumption per capita is going down but means that livestock and poultry products, fruits, fresh vegetables, fishery products replace food crop consumption. The national food consumption itself is increasing year by year. 3

4 Highly publicized international food safety incidents had significant negative impact on the Korean beef market. Outbreaks of Foot &Mouth Disease (FMD) and E.coli O157:H7, and Bovine Spongiform encepphalopathy (BSE)-known as Mad Cow disease in the beef industries around the world in recent years have led to significant loss of consumer confidence in the safety of imported beef in South Korea. Securing Public trust The Korean beef market is undergoing a number of structural changes to accommodate marketing of imported chilled beef. On January 2001, the Korean government liberalized importation of beef in South Korea by replacing import quota with tariff at 41.6 percent Outbreaks of several animal diseases such as Foot and Mouth Disease (FMD), BSE, bird-flu and E.coli O157:H7 in recent years led to significant reduction in consumer confidence of food safety system in South Korea. Restaurant sector in Korea, serving beef dishes as their main menu, is suffering from substantial sales decline in the first quarter of 2004 as Korean consumers are avoiding beef serving restaurants since the BSE outbreak in theu.s. in December This is suspected to be due in large to Korean publics distrust in overall food safety level in Korea and in Korean government s food safety regulation. In order to restore consumer confidence in beef and regain consumer beef consumption, several large retailers and wholesalers are implementing a traceability system in beef marketing. 4

5 Adoption of Food Safety Technology Recent study suggests that the Korean beef merchandisers appear to be willing to pay 10 % premium on beef products that are packaged with biopreservatives. Since packaging beef products with bio-preservative cost more to process than comparable products without the treatment, beef processors and exporters are inclined to pass on the additional costs of this treatment to the Korean buyers. Thus, it is important for beef processors and exporter that the Korean buyers are willing to pay a premium for such treatment in order to have this value adding process to be economically feasible. GMO Safety Management System of the Ministry of Agriculture and Forestry The regulations stipulate requirements to assure safety by giving g specific guidelines on lab facilities for GMO research and development, safety evaluation of GMO, treatment of GMO including storage, delivery, and users' responsibilities. The Ministry of Agriculture provided detailed regulations through the amendment of Evaluation Guidelines on GMO product ' s risk to the environment. Under this regulation, the approval on GMO products requires a certain level of facility and expert for environment experiment, so that any harm that could occur in the lab can be prevented. 5

6 Import & Production Approval and Treatment of GMO the National Agriculture Products Quality Management Service with necessary documents the " the Law on transboundary movements of GMOs " and its enforcement ordinance require; 1 import contract (including import agency contract in case of vicarious execution of importation) or order form 2 document stating name, characteristics and usage of the import item 3 delivery contract showing delivery route, method, and deliverer of the import item 4 safety measures, safety specialists and facility information 5 environment risk assessment made by developer, producer or exporter 6 certificates t including environment risk assessment report issued by the government agency of developer ' s or the exporting country 7 information stated in the attachment II of the protocol. The National Agriculture Products Quality Management Service shall determine whether it is appropriate p to import after reviewing submitted documents and field inspection. 6

7 Border Inspection System Border inspection system for GMO is being set up by the National Plant Quarantine Service in an effort to shut off local distribution of unapproved items imported through illegal channels. Anyone who wants to import GMO should report to the National Plant Quarantine Service with required documents including import certificate issued by the National Agriculture Product Quality Management Service, where on-site inspection is administered d to clear customs. The border inspection includes confirming the export/import approval document, sample collection/verification, and actions after the sample verification (for example, returning, scrapping etc.) Recognizing the importance of the border inspection as a cornerstone for national safety management, the Ministry plans to take comprehensive steps to prevent GMO from being distributed at home by enhancing system and technology. At the same time, the system will reflect various opinions of interested parties and be in line with international rules to conduct border inspection in an effective and rational way. 7

8 Mandatory Labeling for GM Crops in Korea As a growing g number of consumers and environmental NGOs raise the issue of GMO ' s potential health and environmental risks, the Ministry has established GMO labeling system aiming to provide proper information on products and protect consumers ' right. GM commodities which must be labeled include soybean, soybean sprout, potato, and corn, and the Ministry is working to expand the number of the mandatory items. In case of agricultural product on the Must-Labeling items list, imported privately applied by controllable customs, it should be defined whether it is GMO by inspection for each import case, if it is defined as GMO, the labeling condition of each distribution ib ti stage is examined by National Agriculture Product Quality Management Service. In case of non-gmo edible/processed agricultural product imported by Korea Agro-Trade Corporation, Identity Preservation Certificate should be prepared, and GMO mixture should be confirmed and examined if it has met the standard of unintentional mixing degree with the 5~10 pieces of sample collecting from each importing vessel. 8

9 Environmentally Friendly Agriculture. Environment-friendly agricultural products certification system A. Concept This system is to certify safety and quality of environmentfriendly agricultural products after special certification agency's comprehensive inspection under rigid standards to promote environment-friendly agriculture and protect consumers. B. Type of certification There are two types of environment-friendly certification that are one for agricultural product; one for livestock product. The former is subdivided into four namely 1) organic agricultural and forestry product, 2) conversion-to-organic agricultural and forestry product, 3) non-chemical agricultural product and 4) low-chemical agricultural product. The latter is classified into 1) organic livestock product and 2) transition-to-organic livestock product. Major policies on environment-friendly agriculture The objective of environment-friendly agricultural policies in 2005 is to develop competitive environmentfriendly agriculture. The major policies include policies for 1) institutional restructuring t such as reform of the supporting system of environment-friendly agriculture materials; expansion of the direct payment for environment-friendly agriculture; support for farmhouses engaged in environment-friendly agriculture; facilitation of environment-friendly agricultural products distribution; promotion of environment-friendly agricultural product consumption; and improvement of environment-friendly agricultural product certification system 2) pursuing comprehensive nurturing of cultivation land 3) reducing environmental pollution through agricultural material waste and 4) pursuing "Ecological Recycling Agriculture" by recycling livestock manure as resources. 9

10 Idea of Regional Food System (RFS) At the Seventh Meeting of the Agricultural Technical Cooperation Working Group(ATCWG) of the Asia Pacific Economic Cooperation(APEC) in June 2003, the United States proposed p away of moving forward the APEC Food System(AFS). There are four suggestions included in the proposal: 1. complete a self-assessment of all the impediments it faces, internal and external, to increasing productivity in agricultural and food sectors as well as an assessment of obstacles to increasing its capacity to trade in food. 2. identify obstacles that the region faces collectively in creating an APEC Food System and reaching Bogor goals in the food and agricultural sector 3. draft a vision of the future of its food and agricultural sectors. 4. search for an economy to host a formal, first-ever meeting of agriculture ministers to discuss implementation of AFS and a mechanism for closer cooperation in such implementation. ABAC proposed to reduce the cost of trade in food products through trade facilitation measures and to provide technical assistance to upgrade SPS procedures where these inhibit food exports. It also urged members to cooperate on harmonization of regulation and control systems on consumer requirements. Progressive elimination of unnecessary impediments to food trade, such as tariffs, WTO-inconsistent non-tariff measures, and export subsidies was considered as effective way of promoting food trade. ABAC also noted that members should pursue cooperation to assure nondiscriminatory access to food products. recommendation of dissemination of technological advances in food production was to promote regional food technology transfer, to harmonize food safety-related regulations as they apply to technology, and to conduct research development and marketing of food-related technology. ABAC ensured that dissemination of new technologies is consistent with market principles and intellectual property rights and demanded distribution of information on environmentally sound food production and processing techniques. 10

11 Measures for APEC Food system To achieve these goals, ABAC specified four measures; strategy for building the rural infrastructure, food safety and SPS issues, achieving food security in APEC Food System, and a process of trade and investment liberalization. It emphasized that the realization of AFS depends crucially on creating the capacity within rural communities to become fully integrated as active participants in the mainstream of a modern market economy. This infrastructure development would encourage and enable broadbased sustainable economic activity it in non-urban areas. ABAC also argued that non-urban development might contribute to poverty reduction and food security while protecting the environment through expanded off-farm jobs, increasing agricultural productivity and sustainable management of natural Korea Agro-Fisheries Trade Corp. 11

12 Foreign Trade Promotion Data collected : Domestic and overseas production levels, prices, and import/export market situations for each prospective foreign trade item Publishing Methods : Korea Agricultural Trade Information (KATI) network, Korea Agriculture and Food Monthly Magazine Method : Testing Korean foods in overseas markets and modifying their taste and quality to meet consumer preferences Items : Competitive export products such as fruits (apples, pears), vegetables (egg plants,cucumbers), flowers (lilies, roses), and processed 12

13 Recommendations Protection Mechanism from abuse of SPS Information sharing mechanism Technological assistance and technology tran sfer (Promotion of env. agriculture region-wid e) Mutually agreeable Certification Program (Lab. Testing standardization) through SOP Harmonization of regulation Rural community development and education Promotion of stakeholder consultation 13