U.S. pork producers took one for the proverbial team as the United States and South Korea Friday resolved an issue with autos through a compromise on pork to finalize a free-trade agreement between the countries.
The U.S.-South Korea FTA had been held up mostly because of issues related to trade in beef and automobiles. The logjam was broken when U.S. pork producers agreed to move back the effective date on the zero tariff rate on some cuts of pork to Jan. 1, 2016.
The deal isn’t everything the National Pork Producers Council wanted, but it’s close enough, according to NPPC President Sam Carney, a pork producer from Adair, Iowa. “This is still a good deal for us.”
“With the date for a zero tariff on pork moved back, we likely will lose some market share in the South Korean market to Chile,” Carney said. “But as the lowest-cost producer of pork in the world, we’ll hold our own. We still will go to zero six months prior to the EU.”
The FTA, which still must be approved by the U.S. Congress as well as the South Korean National Assembly, would be one of the most lucrative for the U.S. pork industry, according to NPPC, which has championed the pact for more than three years now.
According to Iowa State University economist Dermot Hayes, by the end of the FTA’s 10-year phase-in period, total U.S. pork exports to South Korea will be almost 600,000 metric tons. That represents nearly twice the current U.S. export level to Japan - now the top value market for the U.S pork industry. The FTA will lift live hog prices by $10 per animal and will generate an additional $687 million in U.S. pork exports. South Korea alone will absorb 5 percent of total U.S. pork production, and the FTA will create more than 9,000 new direct jobs in the U.S. pork industry.
The U.S.-South Korea FTA is one of three trade deals that are pending approval by Congress. Agreements with Colombia and Panama also have been awaiting action for more than three years.