Ratification would increase annual U.S. ag exports to Korea, Panama and Colombia by $1.9 billion, $371 million and $46 million, respectively.
Free-trade agreements (FTAs) with South Korea, Panama and Columbia have finally been submitted by the Obama administration to Congress for ratification. The agreements with Panama and Columbia were finalized over three years ago but awaited action by the president before being acted upon by Congress. The House Ways and Means Committee was expected to formally address the three trade pacts on Wednesday of this week, clearing the measures for floor action.
The primary hold-up for the three agreements has been opposition by U.S. labor unions to the agreement with Korea, which is seen as a formidable competitor to the U.S. auto industry, reports the CME Group in its CME Daily Livestock Report.
USDA estimates the agreements with Korea, Panama and Columbia would increase annual U.S. ag exports by $1.9 billion, $371 million and $46 million, respectively. Dermot Hayes, Iowa State University economist, estimates the U.S.-South Korea agreement would push U.S. beef exports to over $1 billion/year when fully implemented in 2026, nearly double the 2010 level. Meanwhile, pork exports to Korea would double in just five years. In addition, the Panama and Columbia agreements will add $25 million to pork exports and $35 million to beef exports by 2016.
“These are obviously important agreements at a time when demand for U.S. meats and livestock are in a somewhat precarious position given the state of the U.S. economy,” the CME Group says. “The expansion of exports to Korea this year in the wake of their foot-and-mouth-disease outbreak last spring should have laid the groundwork for business relationships that will be critical to the U.S. exporters’ capitalizing on these opportunities. Getting the agreements finalized and ratified has become even more important with the recent enactment of FTAs by the EU with Korea and Canada with Colombia.”
Meanwhile, the U.S. Meat Export Federation (USMEF) applauded the progress on FTAs, calling it “a positive step toward improving the U.S. balance of trade and creating new jobs in America.”
Philip Seng, USMEF president and CEO, said the move by President Obama is “a critical step toward passing FTAs that will help ensure a level playing field for U.S. exports internationally. We congratulate our trade negotiators for keeping these FTAs moving forward and urge Congress to move quickly to ratify them.”
Meanwhile, the National Council of Farmer Cooperatives (NCFC) also applauded the president’s action in sending the measures to Congress. NCFC also urged Congress to take up and approve the three FTAs without further delay.
“All three of these FTAs will give U.S. farmers, ranchers, and their co-ops greater access to key export markets for both commodities and value-added products. With over 95% of consumers living outside of the U.S., these agreements are an important step in expanding trade opportunities for American agriculture,” said Chuck Conner, president & CEO of NCFC.