Voluntary Report - public distribution

**Date:** 3/31/2004

**GAIN Report Number:** KS4014

KS4014

**Korea, Republic of**

**Agricultural Situation**

**MMA Quota Increase**

**2004**

**Approved by:**

![](media/image1.wmf)Grant A. Pettrie

U.S. Embassy

**Prepared by:**

Stanley S. Phillips / Sunyoung Choi

**Report Highlights:**

On March 29, 2004, the Ministry of Finance and Economy (MOFE) announced
revised CY 2004 Minimum Market Access (MMA) quota amounts for 14
commodities including potatoes, sesame seed, soybean, etc. The
announcement noted MMA quota revisions are intended to reduce imbalances
in supply and demand and support the local processing industry. This
revision is effective as March 29 and will remain in place through out
the remainder of CY 2004. This report also provides an overview of how
the Korean government determines any changes made to the current MMA
quota.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Seoul \[KS1\]

\[KS\]

Overview of how to go about requesting lower tariffs for an agricultural
product being imported by Korea:

LAW: Article 71, of the Korean Customs Act, defines tariff rate quotas
(TRQ) and identifies the circumstances in which they are applicable.
Under Article 71, TRQ's may be used to reduce tariff rates within a
specified quota volume. In-quota tariff rates may be reduced to 40
percent of the basic tariff rate when it is necessary to: (a) facilitate
the import of specific goods to ensure smooth supply and demand, or to
bolster industrial competitiveness, (b) stabilize the domestic price of
goods and other goods manufactured using the imported good whose import
price rises sharply as a result of existing tariffs, and (c) to correct
widely unbalanced tariff rates among similar goods.

POLICY: If there is no domestic production of the imported good the
likelihood of a positive response to the requested tariff quota will be
higher.

PARTNERS: The domestic industry must petition for the tariff quota.
Local end users (food manufacturers) or importers should submit an
application for assessment of a tariff quota to the Korean government.
The end users may want to work through the Korea Food Industry
Association (KFIA). In 1999, KFIA succeeded in getting an 8 percent
tariff quota created for almonds. There is no standard form for the
application. The application should address the criteria (referred to
above) in Article 71.

TIMEFRAME: Theoretically, an application submitted at anytime during the
year could result in lower tariffs during the same year. However, in
practice, it is unlikely that a request submitted at any point in a year
would result in lower tariffs later in the same year unless there was an
emergency need to import a product to control surging market prices.
Generally, applications are submitted in the last quarter of the year
for changes in next year\'s tariff schedule.

PROCEDURE: The Ministry of Finance & Economy (MOFE) will send a letter
out to relevant Ministries in September of each year. The letter will
ask the relevant Ministries to collect requests from the respective
industries that each Ministry overlooks for any tariff rate quotas. Such
notifications of comment gathering are usually put up on the respective
Ministry\'s website but not on MOFE\'s website. Therefore, the local
industry should begin to check with the Ministry that overlooks their
industry to see if the comment gathering process has begun and submit
their application by the specified deadlines. In the case of food
ingredients, the Ministry of Health and Welfare (which oversees the
Korean Food and Drug Administration) would likely be the relevant
Ministry. After receiving the applications, Ministries review each case
and forward their recommendations for accepting or rejecting the
applications to MOFE. MOFE coordinates an interagency review of the
requests. After receiving feedback from the interagency review, MOFE
makes the final determination (usually in accordance with the
recommending Ministry\'s wishes) and includes any resulting TRQ\'s in
the tariff schedule for the next year which is generally released in
late December.

As a result of the above process, the Korean government recently made
revisions to the revised CY 2004 MMA quota as follows:

**Commodities Subject to MMA Quota Increase on March 29, 2004**

Unit: MT

+-----------+--------------------------+---------+---------+---------+
| HS Code   | Commodity                | MMA for |         |         |
|           |                          | CY 2004 |         |         |
+-----------+--------------------------+---------+---------+---------+
|           |                          | Current | I       | Total   |
|           |                          | (A)     | ncrease | (A+B)   |
|           |                          |         | (B)     |         |
+-----------+--------------------------+---------+---------+---------+
| 070       | Potatoes (excluding for  | 18,810  | 7,300   | 26,110  |
| 1.90.0000 | seed)                    | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 071       | Mung bean (for seed      | 14,694  | 5,006   | 19,700  |
| 3.31.1000 | only)                    | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 071       | Other mung bean          |         |         |         |
| 3.31.9000 | (excluding for seed)     |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 071       | Red beans (for seed      |         |         |         |
| 3.32.1000 | only)                    |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 071       | Other red beans          |         |         |         |
| 3.32.9000 | (excluding for seed)     |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 100       | Maize (for seed only)    | 247 MT  | 103 MT  | 350 MT  |
| 5.10.0000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 071       | Of sweet corn (for seed  |         |         |         |
| 2.90.2091 | only)                    |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 100       | Maize (for feeding only) | 6,      | 4,      | 10,     |
| 5.90.1000 |                          | 102,100 | 297,704 | 399,304 |
|           |                          | MT 1/   | MT 1/   | MT 1/   |
+-----------+--------------------------+---------+---------+---------+
| 100       | Maize (for popcorn only) |         |         |         |
| 5.90.2000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 100       | Other Maize (excluding   |         |         |         |
| 5.90.9000 | for seed or feed and     |         |         |         |
|           | popcorn)                 |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Cereal groats, meal and  |         |         |         |
| 3.13.0000 | pellets of corn          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Other processed corn     |         |         |         |
| 4.23.0000 | (hulled, pearled, sliced |         |         |         |
|           | or kibbled)              |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Corn starch              |         |         |         |
| 8.12.0000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 071       | Of sweet corn (excluding |         |         |         |
| 2.90.2092 | for seed)                |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Flour, meal and powder   | 10 MT   | 50 MT   | 60 MT   |
| 5.10.0000 | of potato                |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Flakes, granules and     |         |         |         |
| 5.20.0000 | pellets of potato        |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Wheat starch             | 227.4   | 1,372.6 | 1,600   |
| 8.11.0000 |                          | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 110       | Other starches           |         |         |         |
| 8.19.9000 | (excluding for wheat,    |         |         |         |
|           | corn, potato, manioc and |         |         |         |
|           | sweet potato)            |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Inulin                   |         |         |         |
| 8.20.0000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Potato starch            | 45,692  | 56,748  | 102,440 |
| 8.13.0000 |                          | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 350       | Roasted starch           |         |         |         |
| 5.10.3000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 350       | Pre-gelatinised or       |         |         |         |
| 5.10.4000 | swelling starch          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 350       | Etherified or esterified |         |         |         |
| 5.10.5000 | starches                 |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 350       | Other modified starches  |         |         |         |
| 5.10.9000 | (soluble starch,         |         |         |         |
|           | roasted, pre-gelatinised |         |         |         |
|           | or swelling, etherified  |         |         |         |
|           | or esterified starches.  |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 350       | Starch glues             |         |         |         |
| 5.20.1000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 350       | Dextrin glues            |         |         |         |
| 5.20.2000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 350       | Other glues (excluding   |         |         |         |
| 5.20.9000 | starch glues and dextrin |         |         |         |
|           | glues)                   |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 110       | Manioc starch            | 2,400   | 6,800   | 9,200   |
| 8.14.0000 |                          | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 110       | Sweet potato starch      | 4,376   | 19,224  | 23,600  |
| 8.19.1000 |                          | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 120       | Soybean (whether or not  | 185,787 | 109,213 | 295,000 |
| 1.00.9000 | broken, excluding for    | MT      | MT      | MT      |
|           | soy bean oil and oil     |         |         |         |
|           | cake)                    |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 120       | Sesame seed              | 6,731   | 87,269  | 94,000  |
| 7.40.0000 |                          | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 121       | Fodder roots             | 3       | 66      | 700,000 |
| 4.90.1000 |                          | 2,133.3 | 7,866.7 | MT      |
|           |                          |         | MT      |         |
|           |                          | MT      |         |         |
+-----------+--------------------------+---------+---------+---------+
| 121       | Other fodder roots       |         |         |         |
| 4.90.9090 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 230       | Other vegetable          |         |         |         |
| 8.00.9000 | materials and vegetable  |         |         |         |
|           | waste, vegetable         |         |         |         |
|           | residues and by-products |         |         |         |
|           | for feed                 |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 170       | Lactose                  | 9,400   | 10,600  | 20,000  |
| 2.11.1000 |                          | MT      | MT      | MT      |
+-----------+--------------------------+---------+---------+---------+
| 170       | Other Lactose            |         |         |         |
| 2.19.1000 |                          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 230       | Supplementary feeds,     | 4,171.4 | 2       | 25,000  |
| 9.90.2010 | chiefly on the basis of  | MT      | 0,828.6 | MT      |
|           | inorganic substances or  |         | MT      |         |
|           | minerals (excluding      |         |         |         |
|           | chiefly on the basis of  |         |         |         |
|           | micro-minerals)          |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 230       | Supplementary feeds      |         |         |         |
| 9.90.2020 | (chiefly on the basis of |         |         |         |
|           | flavorings)              |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 230       | Other supplementary      |         |         |         |
| 9.90.2099 | feeds                    |         |         |         |
+-----------+--------------------------+---------+---------+---------+
| 230       | Other preparations of a  |         |         |         |
| 9.90.9000 | kind used in animal      |         |         |         |
|           | feeding (excluding feed  |         |         |         |
|           | for dog or cat, mixed    |         |         |         |
|           | feeds and supplementary  |         |         |         |
|           | feeds or feed additives) |         |         |         |
+-----------+--------------------------+---------+---------+---------+

1/ On the basis of corn for feed

Source: Ministry of Finance and Economy (MOFE)