Industry Applauds US-Korea Free Trade Agreement

US Agriculture Secretary Vilsack has welcomed the latest US-Korea Trade Agreement.

6 December 2010

4 minute read

North America

Agriculture Secretary Vilsack made the following statement on 3 December following US-South Korea Trade Agreement negotiations:

"Today, I received word that the United States and South Korea concluded negotiations on a historic US-Korea Trade Agreement that promises to provide American agriculture with improved access to more than 49 million Korean consumers. From day one, the Obama Administration has focused on taking the steps necessary to move the economy forward, get our family, friends and neighbors back to work and rebuild a strong economic foundation for future prosperity. The US-Korea Trade Agreement will help us do that. The agreement also puts agriculture in a key position to help achieve President Obama's goal of doubling US exports over the next five years.

Bob Stallman, president of the American Farm Bureau Federation (AFBF) said that the bureau is pleased that the US and Korean governments have come to an agreement that will allow the US-Korea Free Trade Agreement to move forward.

"We are optimistic that what has been agreed to will allow the FTA to reach the steps of Congress for passage. Farm Bureau has been a strong advocate for passage of the agreement and urges President Obama to send the implementing language to Capitol Hill as soon as possible," Mr Stallman said.

“While we are disappointed that there have been changes to the agreement in regard to US pork access to the Korean market, our pork producers will retain better access than our competitors because of the FTA," he continued.

Mr Stallman said that it is critical that the US and Korean governments continue consultations to improve access for US beef into the market. "Regardless, it cannot be overlooked that this agreement presents a great opportunity for US agriculture and warrants the support of all members of Congress," he said.

"The Korean FTA is important for American agriculture and the US economy. At full implementation of the deal, we estimate an increase of $1.8 billion in US agricultural trade per year," Mr Stallman concluded.

“AMI supports the free trade agreement between the United States and South Korea announced by President Obama this evening and urges the Congress to ratify it at its earliest opportunity,” said AMI President and CEO J. Patrick Boyle.

Mr Boyle noted that South Korea is already a major market for US meat. Pork exports in 2010 are expected to exceed $150 million, making South Korea the fifth largest export market for pork. The tariff reduction schedule for pork will further strengthen the US position in this important and growing market.

Beef exports continue to grow, from 233 metric tons valued at $612,000 in 2006 to 56,000 metric tons valued at $56 million in 2009. Through the first nine months of the year, exports to South Korea are up 136 percent in volume and 181 percent in value over the same period last year.

AMI estimates that once the FTA is fully implemented, beef and pork exports to South Korea could increase by $2 billion and resulting in more than 26,700 new American jobs.

“The growth in US beef exports in recent years is due to the successful negotiations of the US government and widespread Congressional support from leaders, such as Senator Baucus (D-MT), for reopening the South Korean market to beef, which was closed from 2003 to 2007. AMI looks forward to working with our negotiators and Congressional allies to continue discussions with Korea to provide full access for all US beef products,” Mr Boyle said.

"“It is encouraging to see the United States and Korea one step closer to a working free trade agreement that will create jobs and increase the profitability of America’s cattlemen and women. For too long, we have missed opportunities to obtain a competitive advantage in Korea by sitting on the sidelines while our competitors complete deals," said NCBA Chief Economist Gregg Doud.

"Congress must ratify this agreement and should do so quickly. If Australia beats us to the signing table, they would have a 2.67 per cent tariff advantage over US beef for the next 15 years. When this agreement is finally signed, sealed and delivered, it would phase out Korea’s 40 per cent tariff on beef imports. We are talking about $325 million in tariff reductions annually once fully implemented. We thank the President and his administration for their efforts and we look forward to working with them to urge Congress to ratify this free trade agreement. This is the beef industry’s stimulus package.”