Source: Michael Fielding, MEATINGPLACE, 10/4/11

Passage of three long-stalled free trade agreements (FTAs) with South Korea, Panama and Colombia — now before Congress for final ratification — would translate into more than $2.3 billion in additional exports and supporting nearly 20,000 jobs here at home, USDA Secretary Tom Vilsack said during a conference call with the media this morning.

The agreement that represents the largest opportunity is the one with South Korea, at one point the largest trading partner with the United States. Now China, the European Union and Japan have overtaken the United States, which commands just 9 percent of the Korean market share, Vilsack said.

South Korea
The agreement would immediately eliminate duties on all farm exports. “To restore our competitiveness in this area, passage of this FTA is extremely important,” Vilsack said.

Vilsack addressed concerns that the U.S. has lost ground in light of the recent ratification of a similar deal between South Korea and the European Union — the EU’s first trade deal with an Asian country, which took effect July 1, 2011. It will eliminate 98.7 percent of duties in trade value within gobr years from the entry into force of the FTA.

“The votes are there (in Congress),” Vilsack said of the expected ratification. The agreement would add an estimated $1.9 billion in agricultural trade to the $5.3 billion currently generated by agricultural trade. “It would mean that the Korean FTA would have a greater impact on agriculture than the nine previous FTAs that we’ve entered into,” he said, calling it a “clear message that allows us to look more aggressively to barriers in the region (such as China and Japan).”

He pointed to the anticipated Oct. 13 White House visit by South Korea’s president, Lee Myung-bak.
In a U.S. Meat Export Federation report following an Iowa agricultural delegation visit to South Korea earlier this year, Leon Sheets, president of the Iowa Pork Producers Association, said that Korea currently needs at least 30 percent of its total meat supply from foreign suppliers.

Colombia
The agreement with Colombia would immediately provide access to its markets. “In 2010 we did almost $830 million in exports there,” Vilsack said. “This will add several hundred million (across all agricultural industries, including wheat, corn and soybeans), and U.S. exporters will immediately receive duty-free treatment.”

The FTA with Colombia comes on the heels of an FTA between Canada and Colombia that took effect In August. Under the pact, Colombian import tariffs on Canadian beef will be reduced to zero over a 12-year period. Set amounts of tariff-rate, duty-free quotas will increase over that period and eventually provide Canadian beef unlimited duty-free access.

What had stalled the U.S. agreement, however, was the Obama administration’s need to address concerns about violence against labor leaders and lack of prosecution against violators, Vilsack explained. It also came up against opposition in the House to approving the three agreements piecemeal.

Panama
"Duty-free trade needs to be two-way street,” Vilsack said of the third agreement with the tiny Central American nation. “The agreement would lower tariffs and level the playing field over time.”
Trade groups praised the move, citing not only the financial implications but also domestic job creation.
“These agreements contain significant export gains for our meat and poultry products that will only be realized by passage and implementation,” said American Meat Institute (AMI) President and CEO J. Patrick Boyle in a statement.

According to a recent impact study conducted in part by AMI, the Korean, Colombian and Panamanian FTAs could increase U.S. exports of beef by $1.4 billion and poultry by $102 million. The jobs resulting from this growth, both in the commodity groups and downstream, would include an estimated 18,000 jobs in the beef industry and 1,200 jobs in the poultry industry.

For the U.S. pork industry, the deals with Colombia, Panama and South Korea, when fully implemented, would add more than $11 to the price producers receive for each hog and generate more than 10,000 pork industry jobs, according to Iowa State University economist Dermot Hayes.

“We need to implement these FTAs now, because while these deals have languished for more than four years, our competitors have negotiated their own trade agreements with Colombia, Panama and South Korea, and the United States has lost market share in those countries,” said Doug Wolf, president of the National Pork Producers Council, which joined more than 80 companies and business and agricultural organizations in signing letters on each of the FTAs, asking Congress to approve the agreements immediately.

Exports are vital to the U.S. pork industry, which last year shipped nearly $4.8 billion of pork, an amount that added about $56 to the price producers received for each hog marketed.
 

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