. /.RESTRICTEDWORLD TRADE
ORGANIZATIONG/STR/Q1/KOR/4
20 May 1999
(99-2045)
Working Party on
State Trading EnterprisesOriginal:  English
STATE TRADING
Questions Posed by the UNITED STATES
concerning the New and Full Article XVII Notification of KOREA1
The following communication, dated 14 May 1999, has been received from the Permanent
Mission of the United States.
_______________
In its notification, Korea does not include certain Trade Associations, or fails to include
certain products that we understand are under the purview of a notified Association.  It is our
understanding that these associations, listed below,  maintain significant influence or even absolute
control over the allocation of specified tariff-rate quotas for the products indicated.
Trade Association Commodities Tariff Quota
Agricultural Fishery Marketing Corp. (AFMC) Green tea, processed cereal grains
Korea Animal Improvement Assoc. (KAIA) Breeding livestock (cattle, swine)
Korea Corn Processors Assoc. (KOCPIA) Corn (processed)
Korea Dairy Industries Organization (KDIO) Whey, butter, lactose
Korea Feed Ingredient Assoc. (K FIA) Bone meal, supplementary feed
Korea Feed Milk Replacer Assoc. (KFMRA) Mixed feed, supplementary feed, whey
Korea Feed Millers Assoc. (KFA) Corn
Korea Paper Manufacturers' Assoc. (KPMA) Manioc starch
Korea Poultry Assoc. (KPA) Purebred breeding chicks
National Agricultural Cooperative Fed. (NACF) Malting barley, malt, manioc starch, other
starches, sweet potato
National Livestock Cooperatives Federation (NLCF) Corn
Could Korea please elaborate in greater detail the type and level of control that these
associations have on the noted markets by completing the state trading questionnaire for each of the
associations listed above?
In its most recent notification, Korea indicates that MAF has the exclusive right to import
tariff quotas on rice and barley.  On the other hand, in the same notification, Korea asserts that barley
is imported directly by the feed companies.  It is our understanding that barley is only imported by
MAF, not the private sector.  Would Korea please clarify whether or not barley can be importeddirectly by private feed companies?  If so, do these private companies conduct import operations
                                                     
1 G/STR/N/4/KORG/STR/Q1/KOR/4
Page 2
independently, or are they simply acting as import agents for the government?  Could the Republic of
Korea please clarify how import prices for barley imported by the Ministry of Agriculture and
Forestry are determined?
We note that in its notification to the Working Party, Korea did not include beef (HS 0201
and 0202) in the description of products affected by the National Livestock Cooperatives Federation
(NLCF).  Accordingly, we would appreciate additional information on the NLCF and a description of
its operations affecting the importation, sale, and domestic distribution of imported beef.  This would
include a summary of the legal basis for granting the exclusive or special rights or privileges with
respect to the importation of beef, including legal provisions and by-laws and a summary of statutory
or constitutional powers, how import levels and resale  prices of imported beef are established by the
NLCF, and how the NLCF sets and announces standards by which it will purchase beef on behalf ofits customers.
We also note that the Government of the Republic of Korea did not include in its notification
the following enterprises:  Korea Cold Storage Co. (KCSC), the Korea Tourist Hotel Supply Centre
(KTHSC), the Korea Restaurant Supply Centre (KRSC), the Korea Meat Industries Association
(KMIA), the Korea Super Chain Association (KOSCA), the Korea Federation of Meat Purveyors
(KFMO), the Korea Livestock Marketing Corporation (KLMC), and the Korea Meat Packers
Association (KMPA).  Similar to our requests pert aining to the NLCF, we would appreciate additional
information on these organizations and a description of their operations as they affect the importation,
sale, and domestic distribution of imported beef.  This would include a summary of the legal basis forgranting exclusive or special rights or privileges with respect to the importation of beef, including
legal provisions and by-laws and a summary of statutory or constitutional powers, how import levels
and resale prices of imported beef are established by each enterprise, and how each enterprise sets and
announces standards by which it will purchase beef on behalf of its customers.
In its responses to section III.A of the new notification format, Korea does not provide
adequate information about the operations of its state trading enterprises.  Could Korea please supply
a basic summary of these operations for each STE that is notified?  This could include additional
information on whether the STE in question issues credit guarantees, engages in the domestic
marketing or distribution of imported products, either directly or through subsidiaries or joint
ventures, or determines the domestic sales price of imports.
In section III.B, we would appreciate it if Ko rea would provide additional information on its
exclusive right to import tariff quotas on rice and barley.  Specifically, do Korea's STEs have the
exclusive right to raise or lower quota ceilings on imported agricultural products?  Do these STEs
have the right to arbitrarily dictate which companies have quota access rights?  How are these
allocation decisions announced publicly so that the quota allocation process is fully transparent?
Concerning Korea's response to question III.E, we understand that the NLCF plays a role in
determining the price for pork exports.  Could Korea please describe in detail the way in which pork
export support prices are determined by the NLCF?
Concerning Korea's response to  question III.F, we would appreciate additional details on how
resale prices of imported products are determined. For example, we understand that beef resale prices
are determined by adding a mark-up which is based on a 3-month rolling average of prices for imports
and domestic cuts.  Is there a set methodology for determining resale price that carries across
commodity lines?  If not, could Korea please describe the methodology for calculating the mark-up orfor otherwise determining the resale price for each imported product?
__________