AMI is joining more than 40 agriculture associations in urging Congressional Leadership to act quickly on implementing the U.S.-Korea Free Trade Agreement (FTA).
“Failure to implement the agreement would not only prevent us from taking advantage of this large and growing market, it would cede our market share to competitors that already have in place or are negotiating their own FTAs with Korea,” said organizations in a letter sent to House Speaker Nancy Pelosi, House Republican Leader John Boehner, Senate Majority Leader Harry Reid and Senate Republican Leader Mitch McConnell.
During the G-20 Summit in Toronto, President Obama announced his intention to set a November deadline for removing outstanding obstacles to the implementation of the U.S.-Korea FTA.
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 exports in a wide range of commodities and result in $1.8 billion in additional sales – a 46 percent increase.
The letter also notes that agreements with Colombia and Panama have been awaiting action for more than three years. On Monday, June 21, the Canadian Senate voted to implement a free trade agreement with Colombia, following approval by Canada's House of Commons on June 15.
“With these actions, Canada's legislature responded to the needs of that nation's producers and exporters, who will soon have a significant competitive advantage over U.S. products in the Colombian market,” the letter states.
According to the American Farm Bureau Federation, the U.S.-Colombia FTA, if and when it is implemented, would result in U.S. agricultural export gains of more than $815 million per year at full implementation.
No implementation - loss of millions and jobs
Without implementation, the letter notes that the U.S. meat industry alone stands to lose $127 million in exports and nearly 1,626 additional jobs. Allowing Canada to beat the U.S. to the punch in Colombia also will cause serious problems for U.S. wheat producers.
In the agricultural sector as a whole, not a single U.S. product currently receives a zero tariff in Colombia, and applied tariffs range from 5 to 20 percent. These could rise to as much as 388 percent under Colombia's current WTO commitments. Under the U.S. FTA, tariffs on 77 percent of all agricultural tariff lines, accounting for more than 52 percent of current U.S. trade by value, would be eliminated immediately. Among the agricultural sectors that would most benefit from the elimination of these tariffs and other trade barriers are: cotton, rice, wheat, corn, barley, sorghum, soybeans, pulse crops, high quality beef, pork, poultry, certain dairy products, potato products, apples, pears, peaches, cherries, almonds and certain distilled spirits.
“The most important thing now is to avoid perpetuating these losses and seeing them mushroom in the years to come by failing to implement U.S. FTAs as soon as possible,” the letter concludes. “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.”