- Congress urged to rapidly ratify U.S./South Korea Free-Trade Agreement.
- U.S. to "intensify engagements" on trade deals with Panama and Columbia.
- U.S. provides some 30 percent of Korea's total agricultural imports.
- Critics point to FTA's shortcomings regarding U.S. rice, beef and pork.
Citing the need to boost the U.S. farm economy while beating competitors to the punch, the Obama administration is pushing Congress to rapidly approve a U.S./South Korea Free-Trade Agreement (FTA). While the FTA is still being translated and hasn’t been sent to Capitol Hill, during a Tuesday press conference Agriculture Secretary Tom Vilsack repeatedly urged Congress not to drag out the ratification process.
"In the next several weeks, Congress will begin looking very closely at the U.S.-Korea trade agreement,” said Vilsack. “At USDA, we believe it represents an historic opportunity to increase exports, create jobs and bolster the American economy - as well as strengthen a vital strategic alliance in the Asia-Pacific area. The U.S. International Trade Commission estimates that economic input to America will grow more from the U.S.-Korea free trade agreement than from our last nine trade agreements combined.”
The deal struck last December “will help to reach our goal of doubling American exports over the next five years and supporting at least 70,000 new American jobs. We’re hopeful Congress will ratify and implement this agreement without delay.”
For more, see U.S./South Korean Free Trade Agreement struck.
Obama, said Vilsack, has “been clear” in directing U.S. trade ambassador Ron Kirk to “intensify engagements” with Panama and Columbia, both potential FTA partners. Some Republicans have urged that FTAs with all three nations be dealt with at the same time. Vilsack’s comments seemed to rule that out.
“I note that the (European Union) passed its own agreement with Korea that goes into effect on July 1. My hope for the farm economy – and the president’s hope for the overall economy – is Congress will move now to ratify and implement this trade agreement as quickly as possible.”
To illustrate the importance of the Korean deal, Vilsack pointed out the United States provides some 30 percent of Korea’s total agricultural imports (worth about $5 billion in agricultural trade) making Korea the fifth-largest market for U.S. farm products.
“Interestingly, the United States used to be Korea’s biggest trading partner. Since 2003, we’ve fallen behind China, the EU and Japan. In just over a decade, our share of Korea’s import market for goods has fallen from 21 percent to just 9 percent.”
The Obama administration believes a U.S./Korea FTA will expand agricultural exports by $1.8 billion and support 16,500 U.S. jobs.
The FTA would “immediately eliminate duties on a majority of U.S. farm products currently exported to Korea. Those include: wheat, corn, soybeans for crushing, cotton, cherries, pistachios, almonds, orange juice, grape juice, wine. It will also reduce duties on many other products over time, including U.S. beef and pork. With ratification of the FTA, Korea’s 40 percent tariff on U.S. beef will be eliminated over the next 15 years.”
One commodity Vilsack didn’t mention is rice.
Last December, Bob Cummings, USA Rice Federation senior vice president, spoke with Southwest Farm Press about the deal’s shortcomings with the grain. “We’re deeply disappointed that rice was excluded from this trade agreement. As a result, we don’t support the trade agreement.
“We’re also looking at the larger picture,” Cummings continued. “Behind the Korea agreement are FTAs with Columbia and Panama.
“The Columbia agreement has some very good provisions for U.S. rice. So, we’re focused on making sure that agreement gets through Congress. We’re working any way we can to make sure that folks have a positive view of trade agreements in general, even though the Korea deal wasn’t good for rice. But when done well, when done correctly, trade agreements help rice and we need to keep the agenda moving forward.”
For more, see Rice Federation on rice litigation, South Korea trade deal.
Other concerns with the U.S/Korea FTA involve U.S. beef and pork. Vilsack acknowledged issues with access to Korean beef/pork markets but continued to point at the clock.
“If we don’t act quickly and decisively, it’s possible America’s competitors will secure their own trade deals with Korea. … Right now, we know Korea is negotiating a trade agreement with Australia, a major U.S. competitor in beef. If Australia completes its agreement with Korea before we do, the tariff cuts for Australian beef will take effect before those of U.S. beef. That would give the Australians a price advantage for at least the next 15 years.”
Vilsack said by 2016, more than 90 percent of U.S. pork exports to Korea will be duty-free.
“It’s in the best interest of American agriculture to get the FTA ratified as quickly as possible for two reasons. One, it would allow for the immediate reduction of tariffs on 60 percent of ag products being exported to Korea making them far more competitive. … Two, any delay gives competitors to finalize their own agreements, which might make it more difficult for us to preserve and expand market share.”