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South Korea pact cheers livestock sector

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Once-beleaguered Manitoba beef and hog producers have another reason to smile after Canada reached a long-sought-after free-trade deal with South Korea.

The deal, announced late Monday in Seoul, will eventually phase out 98.2 per cent of South Korean tariffs on imported Canadian products. And that should mean higher sales of Manitoba beef and pork products to the Asian country.

Granted, it will be up to 15 years before beef producers see the full benefits -- that's how long it will take to completely eliminate the tariffs on fresh, chilled or frozen beef products -- and up to 13 years for hog producers. But that didn't seem to temper the enthusiasm of industry officials on Tuesday.

"We've been out of the South Korea market since BSE (disease) in 2003, so this is really huge for us to get back into that market," Manitoba Beef Producers general manager Melinda German said in an interview.

German said with the new trade deal, record-high beef prices and lower feed costs, Manitoba beef producers have a lot to smile about these days.

The same goes for pork producers, who are also enjoying higher pork prices and lower feed costs these days. And now they're getting freer access to one of their key export markets.

"We're very pleased," said Manitoba Pork Council general manager Andrew Dickson, noting Canada's pork industry had been lobbying hard for Canada to reach a deal after the United States negotiated its own free-trade pact with South Korea in 2011.

That deal had a devastating impact on Canadian exports to the Asian country because it made U.S.-made goods substantially cheaper for Koreans to buy.

For example, federal government data show the value of Manitoba pork exports to South Korea plummeted to $36.7 million in 2012 from $81.1 million in 2011. And it was a similar story for Canadian pork exports, which fell to $129.3 million from $233.4 million.

Dickson said it would have been nice to see the Korean tariffs on Canadian-made products removed immediately.

"But that's what trade negotiations are all about," he added. "So let's just move on now and get into the market. At least this will put us on the same competitive basis as the Americans."

German said "the big kicker" is the deal creates a new export market for offals -- edible internal organ parts -- that typically aren't big sellers in North America.

"We'll be able to move more of that and... get higher value for more of the (beef) carcass. So that is really significant."

Ron Koslowsky, vice-president of the Manitoba division of the Canadian Manufacturers and Exporters, said livestock producers and food manufacturers will likely be some of the biggest beneficiaries of the new deal.

"But you never know. Once you start talking, it's amazing what you can come up with in terms of opportunities," he said. "Now it's up to our companies to take advantage of this agreement and be aggressive (in pursuing trade opportunities)."

Republished from the Winnipeg Free Press print edition March 12, 2014 B6

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