USMEF report: FTAs should top congressional priority list

Sep 9, 2011
by WLJ

Congress faces a busy agenda when it returns from August recess, but U.S. Meat Export Federation (US- MEF) Chairman Keith Miller says few items can offer as much immediate benefit to the struggling U.S. economy as ratification of pending free trade agreements (FTAs) with South Korea, Panama and Colombia.

USDA has estimated that approval of the Korea-U.S.

FTA would boost total U.S. agricultural exports by $1.9 billion. Approval of the U.S.-Panama Trade Promotion Agreement and the U.S.-Colombia Trade Promotion Agreement would increase ag exports by $371 million and $46 million, respectively. Based on an estimated 8,400 jobs supported by every $1 billion in exports, these FTAs will help create nearly 20,000 sorely needed U.S. jobs.

The U.S.-South Korea FTA is projected to boost U.S. beef exports to more than $1 billion per year over the 15-year implementation period. For pork, U.S. exports would more than double by 2016. The Colombia and Panama FTAs would add an estimated $35 million in beef exports and about $25 million in pork exports by 2016.

Miller, a farmer-stockman from Great Bend, KS, adds that ratification of the FTAs has taken on an even greater sense of urgency now that key competitors are moving forward on trade agreements of their own. The European Union has recently implemented advantageous agreements with Korea, Colombia and Peru, while Canada has also implemented an FTA with Colombia. Australia, which is by far the U.S.’ biggest competitor in the Korean beef market, is said to be very close to finalizing an FTA with Korea that would provide a price advantage for Australian beef exports. Korea’s duties on beef imports are currently 40 percent, but would be reduced to zero over a 15-year timetable under these trade agreements. So, the supplying country that is first to have its duties reduced will gain a price advantage that will last for many years.

Despite import duties as high as 30 percent in Panama and a whopping 80 percent in Colombia, U.S. beef has made initial inroads into these markets. Through June, year-over-year beef exports to Panama are up 36 percent in value to $2.2 million, while exports to Colombia have more than tripled to $1.9 million. The FTA with Panama would immediately eliminate duties on Choice and Prime cuts and some offal items, while phasing out most other duties over 15 years. The FTA with Colombia would open the market to an unlimited volume of duty-free Choice and Prime cuts while establishing a duty-free quota for variety meats and other muscle cuts.

Pork exports to these markets hold similar promise, having reached $8.7 million in Colombia and $4.6 million in Panama so far this year. Colombia’s pork duties range from 20 to 30 percent, and would be eliminated by the fifth year of the agreement. Panama’s duty on most pork muscle cuts is 70 percent, but would be reduced to zero on imports falling within a new duty-free quota.

For more on the benefits of these FTAs, please visit — WLJ