While three key U.S. free-trade agreements are stalled in Washington, U.S. competitors are moving ahead with their own FTAs to gain competitive advantages in important international markets, according to the U.S. Meat Export Federation.
At stake are advantageous tariff rates that will facilitate U.S. exports and the jobs that go with those exports.
“Our members have been outspoken to us that approving these free-trade agreements is the highest priority for our industry,” said Philip Seng, USMEF president and CEO. “Congress and the administration have the opportunity to act on these FTAs this fall to keep the U.S. competitive with the EU, Canada and other aggressive competitors.”
“A critical factor in the United States’ ability to maintain the current pace of exports is ensuring a level playing field internationally,” said Seng. “If our international competitors are able to gain significant market access and tariff advantages, that will put U.S. products in a very tough position.”
The United States has pending FTAs with South Korea, Panama and Colombia. The USDA has estimated that approval of these three FTAs would boost total U.S. agricultural exports $1.9 billion, $371 million and $46 million, respectively. Based on an estimated 8,400 jobs supported by every $1 billion in exports, that amounts to nearly 20,000 jobs associated with those FTAs.
The U.S. Congress is expected to take up the FTA issue this month as members return to Washington. U.S. Trade Representative Ron Kirk recently discussed progress on the FTA’s in an interview with Mike Adams, AgriTalk Radio host. “It’s time to move them,” Kirk said. “We’ve already lost enough market share.”
Meanwhile, President Obama is committed to passing the Trade Adjustment Assistance program which is designed to protect workers who lose their jobs due to increased foreign trade. Kirk said he believes that an agreement is possible on the TAA program by a vote which will precede the vote on the FTA’s.
It is unclear if the three FTAs will be submitted to Congress individually or as a package. “Our hope is to get all three agreements voted on reasonably quickly,” said Kirk.
For the U.S. meat industry, it’s projected that the U.S.-South Korea FTA would double pork exports by 2016 to more than $400 million. Implementation would boost U.S. beef exports to more than $1 billion per year over the 15-year implementation period – up from $518 million in 2010.
While the U.S. awaits passage of the FTAs in Washington, the European Union has implemented advantageous trade agreements with South Korea, Colombia and Peru. At the same time, Canada has approved an FTA with Colombia, and Australia and Korea are said to be close to signing an FTA that will benefit Australian beef exports to Korea.
Pressure is growing from agriculture groups for prompt approval of the FTA's. National Cattlemen’s Beef Association President Bill Donald called on the president to send the three pending agreements to Congress immediately.
“If the president is serious about creating jobs, we expect the three trade agreements to be sent to Congress this week," said Donald. “Since President Obama took office, these trade agreements have been collecting dust on his desk. A lot of finger pointing is going on while our competitor’s capitalize on our inability to act on these trade deals.”
“If the president is serious about creating jobs, there should be no doubt in his mind that these trade agreements must be sent to Congress immediately,” said Donald. “Those of us in rural America who depend on free and open trade are tired of bureaucratic speak and political games. It is time for the president to be a leader and send these trade agreements to Congress.”
U.S. meat exports are on a record pace through the first six months of 2011. Beef and pork exports are each projected to top $5 billion for the first time in history during 2011, barring any significant changes in market conditions.
Seng noted that in South Korea, for example, duties on beef imports would be reduced from 40 percent to zero over 15 years while pork duties of 22.5 percent on chilled product and 25 percent on frozen would be phased out by 2016. Countries whose duties are eliminated first gain a material benefit that could last for years.
Source: USMEF, NCBA