Milk sales to Korea may be undermined

Press, 24 September 1983, Page 26

Milk sales to Korea may be undermined

From

BRUCE ROSCOE,

in Seoul

South Korea is embarking on a new agricultural protectionist policy that threatens to undermine New Zealand’s milk sales to the republic. The Assistant Minister for Agriculture and Fisheries, Mr Cho Kyung-Shok, confirmed in an interview that the import duty for milk would be raised from 25 per cent to 40 per cent next year. Western trade analysts in Seoul expect the higher tariff to price New Zealand milk powder out of the reach of many buyers. Mr Cho said Korean farmers “have to be protected.” “Farmers make up over one-quarter of our population, and their income level and living standard is low compared with that in urban areas,” Mr Cho said.

“We do not have many factory projects for the countryside, so I think it is inevitable that we protect our farmers.”

The republic is implementing a major revision of tariffs on as many as 729 commodities, over a fouryear period starting next year. Though a majority of the tariffs in fact are due to be lowered, some of crucial interest to New Zealand will be raised. Apart from butter, tariffs will be introduced or increased for iron ore and coal, a number of edible fats, and live cows. While New Zealand’s milk sales to South Korea at about $65,000 are not large, the new trade controls are being effected just as the New Zealand product is catching on in the Korean market.

Trade sources said New Zealand butter and cheese sales to the republic were confined to the hotel market which meant the products were not reaching ordinary Korean consumers.

“We think it is very good (for our farmers) to produce

more,” said Mr Cho, “even though their prices are not competitive compared with imports. In that case we increase our tariffs. “For items whose production cannot be increased, such as com, we decrease our tariffs." New Zealand stands to gain, however, from scheduled tariff reductions on methanol (up to 10 per cent next year), raw skin (also to 10 per cent), vegetable oil (to 20 per cent by 1988) leather products (to 30

per cent by 1988) and beef tallow (to 10 per cent bv 1988). Mr Cho was pessimistic about the chances of the Dairy Board setting up a joint cheese venture in South Korea because of the low level of cheese consumption. The board has unofficially sounded out the South Korean Government and business interests on the feasibility of such a plant, but Mr Cho said no formal application had been made to his Ministry.