The U.S. House of Representatives passed the South Korea, Panama and Colombia free-trade agreements late on Wednesday, and the Senate was quick to follow. In both houses the trade pacts passed by comfortable margins.
The FTAs will open more than $2.5 billion in new market access for America's farmers and ranchers. Agricultural exports support approximately 1 million jobs in industries including processing, manufacturing and transportation, points out Frank Lucas (R-Okla.), House agriculture committee chair. “Increased market access from the free-trade agreements will create jobs throughout the economy both on and off the farm,” he says.
The National Pork Proudcers Council is calling the passage "one of the greatest victories for the U.S. pork industry."
"It was extremely important that we approved these FTAs now," says Doug Wolf, NPPC president, "because while these deals have languished, our competitors have negotiated their own agreements...and the United States has lost market share."
When fully implemented, these three FTAs will generate $772 million in new pork 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 Dermot Hayes, Iowa State University economist.
Here's a look at some of the impact the FTAs will have on the United States.
- South Korea is a presidential republic with a population of 49 million and a per capita income of $30,000. It ranks 13th in the world economy and already is the United States' seventh-largest trading partner.
- Last year U.S. exports to South Korea totaled $38.8 billion and imports from South Korea were $48.9 billion. South Korea exported 515,000 vehicles to the United States and bought just 14,000, which accounted for 75 percent of the $10 billion trade gap. (Last December the administration negotiated changes in the agreement to remove nontariff barriers and other obstacles to U.S. access to South Korea's auto market.)
- The KORUS FTA would be the most substantial trade action since the 1995 North American Free-Trade Agreement. It would make 95 percent of U.S. goods duty free in South Korea within five years.
- Currently Korean duties on manufactured imports are about 8 percent-- double the U.S. average. Duties on agriculture goods average 54 percent, compared with 9 percent U.S. duties for South Korean goods sold in the United States.
- The agreement would increase protections against copyright infringements and counterfeiting and open access to South Korean government procurement and service markets such as telecommunications.
- The Obama administration says it will increase U.S. exports by more than $10 billion and create 70,000 American jobs.
- For the U.S. pork industry, projections show that the KORUS FTA would generate $687 million in additional export sales, absorb 5 percent of production annually and create more than 9,000 pork industry jobs.
- Colombia has a population of 45 million with a per capita income of $9,800. The country has a history of turmoil driven by drug cartels, guerrilla insurgencies and paramilitaries, but the violence has been quelled in recent years. In August, President Juan Manual Santos, a strong U.S. ally, took office.
- The United States imported $15.7 billion from Colombia in 2010, about two-thirds of which were oil and other mineral fuels; U.S. exports to Colombia totaled $12.1 billion.
- Colombia buys more American manufactured goods than any South American country except Brazil.
- Almost no duties now exist on Colombian goods sold in the United States. Colombian duties on U.S. manufactured goods average about 14 percent.
- The agreement was originally signed in November 2006, but never implemented. Since then, U.S. exporters have had to pay $3.8 billion in tariffs. The FTA would eliminate duties on 80 percent of U.S. consumer and industrial exports.
- According to the Obama administration, the pact will boost U.S. exports by $1.1 billion and increase the U.S. gross domestic product by nearly $2.5 billion. It will provide new access to Colombia's $134 billion service market.
- For the U.S. pork industry, increased export sales would add an estimated $1.15 to U.S. live hog prices and create 3,500 full-time pork sector jobs.
- Panama’s population is 3.5 million, with a per capita income of $13,000.
- Last year the U.S. exported $6 billion worth of goods to Panama and imported only $381 million.
- Today, nearly all of Panama’s agriculture goods enter the United States duty free; that compares to a 40 percent duty on U.S. farm products sold in Panama.
- The average duty on U.S. imports from Panama is 7 percent.
- The FTA eliminates more than 88 percent of Panama's tariffs on consumer and industrial goods and a majority of tariffs on farm exports.
- It makes it easier for U.S. companies to compete for contracts in Panama's $5.25 billion expansion of the Panama Canal, through which passes 5 percent of all world trade.
- It strengthens international property rights and investor rights in Panama.
- For the U.S. pork sector, while Panama may seem like minor market, it helps bridge the flow of trade. Once implemented, projections are that it will raise hog prices by 20 cents and add 600 full-time jobs to the pork industry.
The Associated Press contributed to the article.