Industry urges quick action on trade agreements
Oct. 11, 2011
by Jay Sjerven
WASHINGTON — President Barack Obama on Oct. 3 formally submitted to Congress legislation that would implement pending free trade agreements between the United States and South Korea, Colombia and Panama. The legislation was submitted under trade promotion authority that requires Congress to hold up-or-down votes on each agreement within 90 days.
“Growing American exports to South Korea, Colombia, and Panama will support tens of thousands of jobs here at home,” said Ambassador Ron Kirk, the U.S. Trade Representative. “We must take every opportunity to get America back to work, and Congress should pass these agreements without delay.”
Mr. Kirk said the Obama administration in 2010 and 2011 worked with South Korea, Colombia, and Panama to address outstanding issues related to each of the three agreements. In particular, the administration secured greater U.S. access to the South Korean auto market, increased labor rights and worker protections in Colombia, and enhanced tax transparency and labor rights in Panama, Mr. Kirk said.
"When approved, these agreements will clear the way for new American exports around the world, help create jobs and provide new income opportunities for our nation's agricultural producers, small businesses, and rural communities,” said Secretary of Agriculture Tom Vilsack. “For American agriculture, passage of these agreements means more than $2.3 billion in additional exports, supporting nearly 20,000 jobs here at home.”
The National Grain and Feed Association (N.G.F.A.), which supported each of the three trade accords, said it welcomed President Obama’s decision to submit them to Congress for ratification under so-called “fast-track procedures.”
“Trade is absolutely vital if the United States is to secure economic growth and create new jobs, including in rural America,” said Kendell W. Keith, president of the N.G.F.A. “Exports represent up to one-third of total usage of U.S. feed grains and 50% of total usage of U.S. wheat and soybeans — either as raw commodity exports or as value-added products, such as meat. We look forward to working to secure ratification of these three significant trade agreements, which we believe merit strong support from all members of Congress.”
The N.G.F.A. noted that foreign competitors have negotiated and implemented trade accords with these important markets that have undercut U.S. agricultural competitiveness. For instance, the European Union-South Korea free trade agreement took effect July 1, while a Canadian-Colombia pact was implemented on Aug. 15.
The Grocery Manufacturers Association also praised the Obama administration for submitting the trade agreements to Congress for approval.
“We urge Congress to implement these free trade agreements as soon as possible,” said Pamela G. Bailey, president and chief executive officer of the G.M.A. “The food, beverage and consumer packaged goods industry exports $50 billion worth of goods to 215 countries around the globe, generating a $10 billion trade surplus.
“By passing free trade agreements with South Korea, Panama and Colombia, we will create a level playing field for U.S. products that increase our competitiveness in those countries and help the food, beverage and consumer packaged goods industry innovate, expand and create new jobs.”
Under the Korea-U.S. Free Trade Agreement, nearly two-thirds of U.S. agricultural exports to South Korea would become duty-free immediately, including wheat, corn, soybeans for crushing, and other processed and high-value agricultural products. In fiscal 2010, the United States exported $2 billion in grains and feeds and $644 million in oilseeds and products to South Korea, which accounted for 54% of all agricultural exports to the Asian market.
Under the Colombia Trade Promotion Agreement, more than 80% of U.S. agricultural exports to that country would become duty-free immediately, including wheat, soybeans, soybean meal, and other processed and high-value agricultural products. In fiscal year 2010, the United States exported to Colombia $354 million in grains and feed ingredients, as well as $165 million in oilseeds and products, which accounted for 54% of all U.S. agricultural exports to that Latin American market.
The U.S. market share in Colombia, especially for feeds and grains, has been declining because of competitors’ advantages with their own trade preference agreements. For example, the United States traditionally has been the top supplier of corn, wheat and soybeans to Colombia, accounting for 76% of the market as recently as 2007. But by 2010, the U.S. market share had declined to 27% for these products with most of the business lost to Colombia’s Mercosur partners Argentina and Brazil.
Under the Panama Trade Promotion Agreement, more than half of U.S. agricultural exports to Panama would become duty-free immediately, including soybeans, soybean meal, wheat, barley, and other processed and high-value agricultural products. In fiscal 2010, the United States exported $152 million in grains and feeds and $71 million in oilseeds and products to Panama, which accounted for 55% of all U.S. agricultural exports to Central America.