The World Trade Organisation ruling that South Korea's restrictions on beef imports and on the sale and distribution of foreign beef were illegal provided useful clarification of WTO rules, Trade Negotiations Minister Jim Sutton said today.

The WTO case was taken against South Korea by Australia and the United States, and New Zealand was an active third party.

South Korea has an array of restrictions that stop imported beef from competing on the same footing as domestic beef. These include a dual retail system which requires retailers to install separate display counters and signs if they wish to sell imported beef. The WTO panel hearing the complaint ruled these and other requirements were "less favourable treatment" of imported beef and therefore a breach of WTO rules.

The panel also confirmed South Korea's obligation to fully implement its previous undertakings to liberalise its beef market in 2001.

Another important aspect of the panel's report was the finding that South Korea had breached the WTO agriculture agreement by exceeding the allowable level of domestic support it had provided in 1997 and 1998.

Mr Sutton said the panel report provided important clarification of some of the WTO rules in this area.

Meanwhile, New Zealand was a third party on the successful side of another WTO case panel finding published today.

The panel agreed with the European Union and New Zealand that United States restrictions on wheat gluten imports were in breach of WTO rules on safeguard measures.

"The panel's findings are in line with the arguments New Zealand recently made before another WTO panel that the United States safeguard tariff on lamb is WTO-illegal."

The report of that panel is expected by the end of the year.

Mr Sutton said the WTO panel reports were another demonstration of the importance of the WTO's system of enforceable international trade rules.

"The WTO has helped put agricultural trade on a more equal footing. This is crucial for small exporting nations such as New Zealand."

Mr Sutton expressed the hope that South Korea would promptly and faithfully implement the WTO ruling against it, and that the United States would bring its safeguard practices into line with WTO rules.

ENDS

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