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Industry Demands Immediate Passage Of FTAs

25 May 2011

US - In recognition of World Trade Month and National Beef Month, the National Cattlemen’s Beef Association (NCBA) hosted a news conference on Capitol Hill urging the Obama administration to send pending free trade agreements with Colombia, Panama and South Korea to Congress immediately.

NCBA was joined by American Farm Bureau Federation; American Soybean Association; National Association of Wheat Growers; National Corn Growers Association; and National Pork Producers Council. The news conference was moderated by House Committee on Agriculture Chairman Frank Lucas (R-Okla.).

NCBA President Bill Donald said the pending trade agreements are long overdue and the unprecedented delay is putting US agriculture at a competitive disadvantage.

“If Congress approves these agreements, the United States will ultimately have free trade for US beef with approximately two-thirds of the population in the Western Hemisphere,” said Donald. “Failure to implement the pending free trade agreements sends the wrong message to major export markets like China and Russia – markets with tremendous potential but limited or nonexistent access. That demand will be met, why not with American beef?”

US beef exports to South Korea added $25 in value to each of the 26.7 million head of steers and heifers produced in the United States in 2010. Unfortunately, according to Donald, all cuts of US beef are hit with a 40 per cent tariff resulting in more than $200 million in tariffs in 2010.

When implemented, the agreement will phase out the 40 per cent tariff, with $15 million in tariff benefits for beef in the first year of the agreement and roughly $325 million in tariff reductions annually once fully implemented.

According to the US International Trade Commission, annual exports of US beef could increase as much as $1.8 billion once the agreement is fully implemented. If Australia, however, successfully ratifies a similar bilateral trade agreement with South Korea before the United States, it would have a 2.67 per cent tariff advantage over American beef for the next 15 years.

“Although US cattle ranchers stand to gain the most from the trade pact with South Korea, we cannot underestimate the tremendous opportunity in Colombia and Panama,” said Donald. “Eliminating outrageous tariffs will undoubtedly create enormous opportunities for US cattlemen.”

The US-Colombia Trade Promotion Agreement, when implemented, will immediately eliminate one of the highest tariffs for US beef anywhere at 80 per cent for prime and choice US beef. All tariffs on beef and beef products will phase out over 15 years. Donald said for the first time ever, American beef will be on competitive footing with beef imports from Brazil and Argentina. In 2010, the United States exported approximately $759,000 of beef and beef products to Colombia, a paltry sum, according to Donald, considering the “excessive” duties. Like Colombia, the Panama Free Trade Agreement immediately eliminates the 30 per cent tariff on prime and choice cuts and all other duties would be phased out over 15 years.

“If the president is genuine in his goal of doubling exports by 2014, he should end this five-year delay on these agreements. I urge President Obama to send these agreements to Congress today,” said Donald. “Members of Congress – prepare your yes vote and push all three of these agreements across the finish line. This is a stimulus package that doesn’t cost taxpayers a dime.”

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