President Obama has signaled his intention to set a deadline for removing outstanding obstacles to the implementation of the U.S.-Korea Free-Trade Agreement to gain congressional approval of the deal in 2011. The FTA would be one of the most lucrative ever for the U.S. pork industry, according to the National Pork Producers Council, which has championed the pact for three years.
The administration's slow movement on trade thus far has favored labor interests, including its failure to move forward on pacts with Colombia and Panama, reports the Wall Street Journal.
The announcement Saturday is also meant to buttress U.S. support of South Korea at a time when it is facing renewed hostilities with North Korea.
At the G-20 summit in Toronto this past weekend, the president indicated he wants the deal done by the next G 20 meeting, which will be held in Seoul, South Korea, in November. U.S. Trade Representative Ron Kirk will be assigned to work alongside his Korean counterpart to implement the FTA.
The U.S.-Korea FTA was completed and signed on June 30, 2007, but it has been awaiting action by Congress. Legislation has been held up by demands from some lawmakers that improvements be made to the agreement in certain sectors, including automobiles.
“Having a firm deadline for resolving the outstanding issues is a major step forward and is wonderful news for American pork producers,” said Sam Carney, NPPC president and pork producer from Adair, Iowa. “This is what we have been hoping to hear for almost three years,” he added. “The export opportunities the FTA offers U.S. producers of pork and many other agricultural products in the Korean market are truly remarkable.”
According to Iowa State University economist Dermot Hayes, by the end of the FTA phase-in period, total U.S. pork exports to Korea will be almost 600,000 metric tons. This represents nearly twice the current U.S. export level to Japan – currently the top value market for the U.S pork industry. The FTA will lift live hog prices by a staggering $10 per animal when fully implemented and will generate an additional $825 million in U.S. pork exports.
Korea alone will absorb 5 percent of total U.S. pork production, and the FTA will create more than 11,000 new jobs because of increased pork exports alone.
“Given the difficulties our industry has faced over the past two years because of the economy, H1N1, higher costs of production and unjustified foreign trade barriers, the prospect of a firm date for implementation of the Korea FTA would be great news for U.S. pork producer,” Carney said.
“It would also help many other American farmers who depend on export markets for a major share of their income and who have been growing fearful that agreements between Korea and some of our competitors could leave us worse off than we are now,” Carney added.