U.S. agricultural exports to South Korea would expand by an estimated $1.9 billion per year if the U.S. free-trade agreement with that country were implemented, according to USDA Economic Research Service report.
The U.S.-Colombia FTA would result in an estimated $370 million in additional U.S. exports per year with smaller gains of about $50 million per year under the pact with Panama.
Other countries have become increasingly active in negotiating their own trade pacts. This proliferation of trade agreements between key U.S. trading partners and competitors may have raised concerns among U.S. exporters, whose share in established markets could be eroded by such deals.
In the study, ERS examines how recently concluded trade agreements between Southeast Asia countries (ASEAN) and China and Australia/New Zealand, as well as pending agreements between the United States and Korea, Colombia, and Panama, will likely affect U.S. agricultural trade. To view the report, click here.
Model results suggest that trade agreements between ASEAN countries and China and ASEAN countries and Australia/New Zealand would result in moderate losses to U.S. agricultural exports of about $350 million to those countries, but losses would be partially offset by gains in other markets.
Empirical results confirm theoretical findings that trade created under free-trade agreements exceeds trade diverted, but that results depend on the specific circumstances of each agreement.
Since 2001, the United States has concluded negotiations with 13 countries, resulting in 8 trade agreements.