Obama administration officials are gearing up to ask Congress to pass a U.S.-South Korea Free Trade Agreement. But farm groups and officials from previous administrations are asking the president to move forward with two other FTAs as well.
The latter are also asking why it’s taken so long to get the three agreements – all negotiated during the Bush administration – to this stage, a delay they say has allowed competing export countries to grab U.S. market share.
“These three trade agreements combined represent almost $3 billion dollars of additional agriculture exports to these trading partners,” said Steve Wellman, first vice president of the American Soybean Association. “These gains can only be realized by implementation of these three agreements.”
The agreements and the lack of progress in getting them ratified was a prime topic of conversation at Commodity Classic in Tampa. The Classic is the annual gathering of the nation’s major grain and oilseed commodity groups – the American Soybean Association, National Corn Growers, National Association of Wheat Growers and National Sorghum Producers.
During the Ag Issues Forum held prior to the Commodity Classic. Ambassador Clayton Yeutter, the U.S. Trade Representative under President Reagan, called the lack of action on the proposed Columbia Free Trade Agreement “shameful.”
“What we’ve done with Columbia, which is one of our strongest allies in Latin America, is to leave them twisting slowly in the wind,” said Yeutter, who also served as agriculture secretary in the first Bush administration. “In the interim, some of our competitors have moved in and grabbed some of our share of that market.”
The Columbia, Panama and South Korean Free Trade Agreements were negotiated by former U.S. Trade Representative Susan Schwab, but congressional leaders did not bring them up for a vote because of opposition from various groups. The U.S. auto, beef and rice industries had expressed reservations, in particular, about the South Korea FTA.
The latter was re-negotiated by Ambassador Ron Kirk, the U.S. Trade Representative for the Obama administration, and now is supported by the auto and beef industries. The USA Rice Federation continues to oppose the South Korea agreement.
$1.8 billion export potential?
When the South Korea agreement is fully implemented, increased exports of the major grain, oilseed, fiber, fruit and vegetable and livestock products could exceed $1.8 billion annually. The Korea agreement will allow the United States to become a competitive supplier of agricultural products to South Korea by providing duty-free and reduced tariff access.
“The agreement offers immediate duty-free access to U.S. soybeans for crushing and to U.S. soybean meal,” according to ASA’s Wellman, a producer from Syracuse, Neb. “For the first time, producers of U.S. food-grade soybeans would have access to the South Korean market outside of the import monopoly created by the Korean State Trading Enterprise. Tariffs on refined soybean oil would be eliminated over 5 years, and tariffs on crude soybean oil would be eliminated over 10 years.
“Domestic demand for U.S. soybean meal will also increase because this agreement is expected to generate millions of dollars of new meat and poultry exports. Domestic livestock consumed 28 million metric tons of soybean meal in 2010, using nearly 80 percent of all the soybean meal processed in this country.”
The U.S.-Colombia Trade Promotion Agreement eliminates tariffs on U.S. agricultural products, correcting the current tariff imbalance in agricultural trade between our countries, created in part by congressional passage and extension of the Andean Trade Preference Act (ATPA). Elimination of Colombia’s duties in the agricultural sector would create new opportunities for American farmers and ranchers in this market, particularly relative to other suppliers that already have trade agreements with Colombia.
“Under this agreement, Colombia will immediately eliminate tariffs on soybeans and soy meal and flour,” Wellman said. “It will provide immediate duty-free access for crude soybean oil through a 31,200-ton quota with four percent annual growth and will phase-out the out-of-quota tariff of 24 percent for crude soybean oil over 10 years. Colombia also will phase out its 24 percent tariff for refined soybean oil over 5 years.”
The United States already has a large share of the Panamanian agricultural market that must be protected. Averaged across all agricultural products, the United States supplies 53 percent of Panamanian agricultural imports. For the commodities most important to the United States, the share is more than 80 percent.
(For more information on the three trade agreements, go to http://deltafarmpress.com/government/rapid-ratification-uskorea-trade-agreement-urged.)
The U.S-Panama Trade Promotion Agreement will prevent other countries, specifically other Latin and North American suppliers, from taking some of the current U.S. share of the Panamanian market. In addition, Panama has completed a trade agreement with Canada. If this agreement goes into effect before the U.S. agreement, Canadian exporters will gain a significant competitive advantage over the United States in the market.
“There is an urgent need for passage of these agreements,” Wellman said. “The Panama FTA would permanently lock-in duty-free treatment of U.S. exports of soybeans, soybean meal, and crude soybean oil.”