U.S. pork producers and meatpackers could soon get a glimpse of the future under the three free-trade agreements quickly approaching approval in Congress. The three FTAs could add $163 million a year to Iowa’s $21 billion farm economy when fully implement. Pork producers are expected to see the biggest impact, according to the American Farm Bureau Federation.
The Des Moines Register reports that the trade agreement with Korea in particular is expected to be a boon to the U.S. pork industry. Prices for pork have soared in recent months, and many producers have expanded their herds. This expansion is partly due to South Korea temporarily lifting its duty on pork imports following a devastating outbreak of foot-and-mouth disease earlier this year.
The 25 percent duty will return ounce South Korea farms return to normal, but the tariff would eventually go away for good under the pending trade agreement between the U.S. and South Korea.
According to Iowa State University economist Dermot Hayes, who has been advising the National Pork Producers Council on the trade deals, the pork industry has a positive export outlook.
“The pork industry has the opportunity to expand because of the exports,” Hayes said in the article. “That’s exactly what’s happening right now.
If the trade deal is approved, most U.S. pork can enter South Korea duty-free in 2016. South Korea’s 40 percent tariff on beef will be phased out over 15 years.
The overall economic impact of the FTAs would appear relatively small, but the surge in pork exports to South Korea this year illustrates the impact that removing trade barriers can often have on exports and the farms and business that produce the products.
Source: The Des Moines Register