This paper is designed to measure an impact of an FTA on domestic related industry, considering a substitution effect between imported and domestic goods in a partial equilibrium model. Many papers on FTA have assumed implicitly or explicitly that goods imported are homogeneous to goods produced domestically. However, price gap between imported and domestic goods observed in market does not support the homogeneous-good assumption. Thus, it is appropriate to deal with imported goods as heterogeneous to domestic goods. In this model, imported goods are dealt with as one of substitutes for domestic goods. When this approach is applied to Korea beef market, it turns out that an FTA with the US has a smaller impact on Korea beef market than when the homogeneous-goods assumption is applied.