<fta_2010>

FREE TRADE AGREEMENTS

FREE TRADE AGREEMENTS

Groups Urge Immediate Action on FTAs

Obama To Push Deal To Finalize Korea Trade Pact

U.S. Pork Producers Lose Out: Canada Approves Free Trade Deal

Without FTAs, U.S. Pork Producers Could Suffer

Groups Urge Immediate Action on FTAs

(To read the coalition letter, click here)

Washington, D.C., July 8, 2010 - An ad hoc coalition of agricultural and food organizations in a letter sent today urged members of Congress to work with the Obama administration to remove any remaining impediments to a “rapid implementation” of the free trade agreements with Colombia, Panama and South Korea.

At the recent G20 Summit in Toronto, President Obama announced a November deadline for dealing with outstanding obstacles to the implementation of the U.S.-Korea Free Trade Agreement (FTA) to gain congressional approval of the deal in 2011.

That agreement and the FTAs with Colombia and Panama were finalized more than three years ago – and approved in those countries – but are awaiting congressional action.

The 42 groups that signed on to the letter pointed out that other countries are moving forward with FTAs with Colombia, Panama and South Korea to the detriment of the United States. Canada and Colombia, for example, recently approved a trade deal that gives duty-free access to a host of Canadian products going into the South American nation.

Over the past five years, Colombia has been the largest market in South America for U.S. agricultural products, with exports totaling $4.3 billion. According to the American Farm Bureau Federation, the U.S.-Colombia FTA would boost U.S. agricultural exports by more than $815 million a year.

“But now that Canada has gained preferential access ahead of us,” the organizations said, “we are likely to be operating in catch-up mode for years to come.”

That already is occurring for some sectors. U.S feed grain producers, for example, have been particularly hard hit because of the preferential access their foreign competitors have in the Colombian market, with the U.S. market share falling sharply from 96 percent in 2007 to 38 percent in 2009.

“The fact is, literally hundreds of FTAs are being negotiated around the world, and global trade liberalization is taking place. But it is taking place with the United States standing on the sidelines,” said the groups.

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Obama To Push Deal To Finalize Korea Trade Pact

Washington, D.C., June 28, 2010 - 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 (FTA) 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 now.

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 tasked with working with his Korean counterpart to bring about.

The U.S.-Korea FTA was completed and signed on June 30, 2007, but it has been awaiting action by Congress on the necessary implementing legislation. That 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 NPPC President Sam Carney, a 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 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. Korea has in place or is currently negotiating 13 other trade agreements, covering some 50 countries, many of which are competitors in food and agricultural products.

The Korean market is now the fifth largest for U.S. agricultural exports, valued at $3.9 billion in 2009. According to economic analysis by the American Farm Bureau Federation, the Korea FTA would expand those exports in a wide range of commodities and result in $1.8 billion in additional sales – a 46 percent increase.

Commodities that will gain immediate duty-free access to the Korean market upon implementation include wheat, feed corn, soybeans for crushing, hides and skins, cotton and a broad range of high-value agricultural products. These include almonds, pistachios, wine, bourbon and Tennessee whiskey, raisins, grape juice, orange juice, fresh cherries, frozen French fries, frozen orange juice concentrate, corn gluten feed and meal and pet food.

A number of commodities will gain free access two years after implementation, including avocados, lemons, dried prunes and sunflower seeds, or five years, including food preparations, chocolate and chocolate confectionary, sweet corn, sauces and preparations, corn sweeteners, corn oil, other fodder and forage (alfalfa), breads and pastry, grapefruit and dried mushrooms.

Other U.S. farm products will benefit from expanded market access opportunities through new or expanded tariff rate quotas. These include skim and whole milk powder, whey for food use, cheese, starches – including high-value modified corn starches – barley, popcorn, and soybeans for food use. Market access improvements will also be seen for beef products, pears, apples, grapes and oranges.

The U.S.-Korea FTA is one of three that are pending approval by Congress. Agreements with Colombia and Panama also have been awaiting action for more than three years. NPPC has been calling for action on all three FTAs for years, pointing out the enormous risk of letting other countries move forward first.

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Canada Approves Free Trade Deal With Colombia,

U.S. Pork Producers Lose Out

Washington, D.C., June 24, 2010 - The Canadian Senate late Monday gave final approval to a free trade agreement (FTA) with Colombia, ensuring that exports of Canadian pork products and many other food and agricultural commodities will have immediate market-access advantage over U.S. products in the Colombian market.

The United States and Colombia signed a free trade agreement Nov. 22, 2006 – now more than three and a half years ago. The Colombian Senate in 2007 voted to approve the agreement by a margin of 55-3 and the House by a margin of 85-10. The U.S. Congress has not yet begun debate on the implementing legislation.

According to Iowa State University economist Dermot Hayes, the U.S.-Colombia FTA, when fully implemented, would raise Live U.S. hog prices $1.15 above what would otherwise be the case. With Canada’s action and with the failure of the U.S. government to implement the U.S.-Colombia FTA, trade benefits now will shift to Canadian pork producers. Hayes says that if the U.S. does not implement its FTA with Colombia, the U.S. will be completely out of the Colombian pork market within 10 years because of Canada’s FTA tariff advantage.

“It is unfortunate that our producers have to pay the price for U.S. inaction on trade,” said Sam Carney, president of the National Pork Producers Council and a pork producer from Adair, Iowa. “Canada will gain the inside track on future export opportunities in the sizeable and growing Colombian market."

“The sad truth is that the hardest market to gain access to is the one that is lost to competitors. Business relationships between Canada and Colombia will become established, and when that happens, our only hope will be if we can offer a more competitively priced product,” Carney said. “But that will be virtually impossible if Colombian tariffs on Canadian products remain lower than on ours for years to come.”

The U.S.-Colombia FTA is one of three that are pending approval by Congress. Agreements with South Korea and Panama also have been awaiting action for more than three years. Panama also recently finalized an FTA with Canada, and South Korea is nearing completion on a deal with the European Union, so those markets are also in jeopardy of being lost to competitors. The U.S. FTA with South Korea alone would add $10 to the price of each U.S. hog sold, according to an analysis by Iowa State’s Hayes.

NPPC has been calling for action on all three FTAs for years, pointing out the enormous risk of letting other countries move forward first. Now that the risk is becoming reality, it is critical that the U.S. act quickly to at least keep its exports on a level playing field.

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Without FTAs, U.S. Pork Producers Could Suffer

Washington, D.C., May 3, 2010 - The failure of the United States to approve free trade agreements with Colombia, Panama and South Korea would result in the U.S. pork industry being out of those markets within 10 years at a cost to producers of more than $11.50 per pig and to the U.S. economy of thousands of jobs, according to analyses released today by the National Pork Producers Council.

Conducted by Iowa State University economist Dermot Hayes, the analyses take into account the trade agreements the three countries have concluded with other nations. Colombia and Panama recently finalized FTAs with Canada, and South Korea is nearing completion on a deal with the European Union.

NPPC joined with the American Farm Bureau Federation, National Association of Wheat Growers, National Cattlemen’s Beef Association and National Corn Growers Association in decrying congressional inaction on the pending trade deals at a press conference today.

“It is clear,” said Don Butler, NPPC immediate past president, “that without new trade agreements, the United States will be going backward by standing still. Our industry can’t afford that; our country can’t afford that.

“For us to remain a successful and viable industry,” added Butler, “we need new and expanded market access. And the way to get that is through free trade agreements.”

Exports are vital to the U.S. pork industry, which last year shipped more than $4.3 billion of pork products, an amount that added about $38 to the price producers received for each hog marketed.

Pork – and other – exports also create jobs, adding to the overall U.S. economy. For every 1 percent increase in the size of the U.S. pork industry, an expansion that would come through a rise in exports, 920 full-time pork industry jobs are created and nearly 4,600 jobs are generated throughout the economy, according to Hayes.

The U.S.-South Korea Free Trade Agreement would add $10 to the price U.S. pork producers receive for each hog marketed and would create more than 3,600 pork industry and 18,000 total jobs. The FTAs with Colombia and Panama would, espectively, add $1.15 and 20 cents to the price of each hog sold and generate 3,500 and 600 pork industry jobs, according to a separate analysis of the FTAs conducted by Hayes.

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