Cattlemen optimistic about trade agreements

Oct 14, 2011

After several years of stressing to lawmakers the importance of new trade agreements with some of the world’s largest beef importers, beef producers were optimistic last week as the U.S. House of Representatives and U.S. Senate voted in favor of the pending free trade agreements with Colombia, Panama and South Korea.

California Cattlemen’s Association President Kevin Kester, a lifelong rancher from Parkfield, CA, has been closely following this issue for years and recently returned from a trip to the na tion’s capitol where he met with California’s congressional delegation to encourage them to support the free trade agreements. Kester called last week’s vote an important win for California livestock producers.

“Not only is getting these trade agreements passed a win for our nation’s food producers, it is also a win for our nation’s economy,” Kester said. “The agreements ensure access to some of the world’s largest beef-consuming areas, including South Korea, which is vital in helping keep our product moving and in keeping American ranchers in business,” Kester said.

For several years, the National Cattlemen’s Beef Association and affiliates have been leaders in advocating for the passage of these crucial trade agreements. Kester said the passage of the agreements by the House of Representatives and the U.S. Senate is one more necessary step to getting the agreements to the president’s desk and signed in order to keep commerce moving.

Agriculture Secretary Tom Vil sack said in a released statement, “We are pleased that both Houses of Congress acted swiftly to support tens of thousands of American jobs today by ratifying trade agreements with South Korea, Colombia and Panama, as well as trade adjustment assistance to help train workers for the 21st century economy. For American agriculture, passage of these agreements means over $2.3 billion in additional exports, supporting nearly 20,000 jobs here at home.”

Vilsack also added that the agreements secure market for America’s agriculture sector. “Immediately upon implementation of these agreements, the majority of American products exported to Korea, Colombia and Panama will become duty-free,” he added.
Congress’ swift action is said to have kept competitors from striking their own trade deals with these three nations.
The National Sorghum Producers (NSP) commended Congress for ratifying the three bilateral trade agreements. Calling it possibly the largest jobs bill of the year, NSP said this is a huge step for the agriculture industry.
“We are extremely pleased to see Congress move so quickly to pass these long-standing free trade agreements,” said NSP Chairman Terry Swanson of Walsh, CO.
“The agriculture industry has waited nearly five years for this to happen, and given the state of our struggling national economy, an agreement that is expected to generate more than $2 billion annually to U.S. farm exports and support nearly 20,000 American jobs just makes sense,” he added.
“On behalf of America’s farmers and ranchers, I have been advocating for these agreements to strengthen our trading relationships in these important markets. I am pleased that after five years of waiting for action, our agricultural industry will benefit from significant, new market access. These agreements will put us in a better position to compete globally, expand U.S. exports, create jobs, and bring much-needed income to communities across rural America,” said House Committee on Agriculture Chairman Frank D. Lucas, R-OK.
Currently, Colombia imposes duties on all American agricultural products. They range from 5 percent to 20 percent. The U.S. sells more than $830 million in agricultural products there. Under this agreement, Colombia would eliminate tariffs on 70 percent of U.S. exports. Also, American agricultural products would no longer be subject to tariffs and would become more cost-competitive, according to a statement Lucas released. The American Farm Bureau Federation (Farm Bureau) estimates the U.S. will see $370 million more in farm exports to Colombia annually.
More than 60 percent of U.S. farm exports to Panama face some sort of duty or tariff. Those tariffs average 15 percent, but they can be as high as 70 percent on meat, 90 percent on grain, and a staggering 260 percent on poultry. Meanwhile, more than 99 percent of Panama’s farm exports enter the U.S. duty free. According to Lucas, this agreement not only creates new opportunities for America’s farmers and ranchers, but it levels the playing field for American exporters.
Korea is the fifth largest market for U.S. agricultural exports, according to Lucas. But currently, America’s producers face an average tariff of 54 percent when exporting to Korea. Similar goods from Korea enter the U.S. at an average rate of only 9 percent. Passing this agreement corrects that imbalance and provides better access to Korea’s 49 million consumers. Farm Bureau estimates that once the agreement is fully implemented, the U.S. could see $1.9 billion in increased farm exports.
Those against the passage compare it to previous trade agreements, claiming that jobs will be lost. Congressman Leonard Boswell, D-IA, voted against the free trade agreements.
“This shaky trade legislation is not a true job-creator. The reality is, these deals put tens of thousands of jobs on the line during an especially difficult time for our country. Let us not forget the effects of previous trade agreements on our communities—the most vivid example being Newton when thousands of workers lost their jobs after the Maytag plant closure. We cannot risk that again by allowing trade agreements that only benefit big corporations at the expense of our working class,” Boswell said.
President Obama now must certify the agreements. The Colombian, South Korean and Panamanian governments have approved their own versions of the agreement. Obama will then set an implementation date for the phase-out of trade barriers, taxes and tariffs on American products to begin, which is most likely to happen early next year. — Traci Eatherton, WLJ Editor