While skeptics and critics remain over Congress’ long-awaited approval of the South Korea, Colombia and Panama free-trade agreements, it’s not a stretch to say that folks in agriculture are nearly giddy at the outcome. Today, instead of frustration over the fact that these deals have languished for more than four years, agricultural groups are all heaping praise and gratitude on lawmakers.
The National Pork Producers Council is calling it one of the “greatest victories ever for the U.S. pork industry.” South Korea alone could import as much as 5 percent of the United States’ annual pork production.
“These trade agreements will be a boon for U.S. pork producers and for the U.S. economy and jobs,” says Doug Wolf, NPPC president and a pork producer from Lancaster, Wis. It’s estimated that these FTAs could create 250,000 American jobs.
Getting the three trade pacts approved yet this year was critical because the United States has already lost ground to other countries that have secured trade deals with South Korea, Colombia and Panama this year. “The United States has lost market share in those countries,” Wolf says.
As an example of the lost market share for U.S. agriculture, Colombia imported 3 million tons of corn in 2007, with the United States claiming a 95 percent market share. In 2010, imports fell to 700,000 metric tons and U.S. market share shrunk to less than 20 percent.
Ratification of the agreements provides for immediate duty-free access for most U.S. goods, creating opportunities for increases in U.S. agricultural exports which will generate economic growth and U.S. jobs, points out the U.S. Grains Council. The agreements are expected to generate roughly $13 billion in additional export revenue, with approximately $11 billion of the total flowing to South Korea.
USGC Chairman Wendell Shauman and Thomas Dorr, USGC president and chief executive officer, will travel to Colombia and Panama to meet with private sector and governmental leaders aimed at regaining U.S. grain exports to the region.
"With a level playing field, the United States has an excellent chance of winning back these markets," Shauman say. “We have a shipping advantage from the Gulf Ports, and we have historically been a trusted partner and preferred provider for grain exports in the Caribbean Basin. It’s great to be back in the game."
The United States continues to be the world’s largest corn producer and exporter, shipping out 50.4 million metric tons last year.
“The three free trade agreements with Korea, Colombia and Panama provide great opportunities for America’s farmers,” says Garry Niemeyer, National Corn Growers Association president and a corn grower from Auburn, Ill. “Passage by Congress ensures our industry continues to lead the nation in economic growth and international competitiveness. In addition, this action shows members of Congress understand the importance of the FTAs to rural America.”
For the U.S. pork sector, when fully implemented the three FTAs will generate nearly $772 million in new export sales, add more than $11 to the price producers receive for each hog marketed and create more than 10,000 pork industry jobs, according to Iowa State University economist Dermot Hayes.
The U.S. pork industry was instrumental in getting the trade agreements approved, particularly the deal with South Korea. Last December when the United States and the Asian nation were at an impasse over trade in autos, the U.S. pork industry agreed to move back the effective date for when much of its exports enter Korea at a zero tariff rate.
“America’s pork producers are grateful to the Obama administration's trade team, including U.S. Trade Representative Ron Kirk, and to Congress for getting the trade agreements done,” Wolf says. “Now we call on the United States and these three FTA partners to get the agreements implemented ASAP. The longer it takes to implement, the more U.S. market share in these nations will be imperiled.”
Exports are vital to the U.S. pork industry, as NPPC points out, last year exports totaled nearly $4.8 billion, which added about $56 to the price producers received for each hog marketed.