Free Trade Agreements Would Boost Ag Economy
WASHINGTON--Citing the vital importance of trade to U.S. agriculture, the American Farm Bureau is urging the Obama administration to submit the U.S.-Colombia Trade Promotion Agreement (CTPA) and the U.S.-Korean Free Trade Agreement (KORUS FTA) to Congress for a vote.
In separate comments sent this week to the U.S. Trade Representative, AFBF said the trade pacts allow the United States to become a competitive supplier of agricultural products to Colombia and Korea. AFBF urged the administration “to not delay” in submitting the implementing legislation and called on Congress to pass the agreements. Though comments were not requested on the U.S.-Panama free trade agreement, AFBF urges congressional passage of that pact as well.
“These agreements offer great market opportunities for farmers all across our country,” said AFBF President Bob Stallman. “Swift passage of the trade agreements is vital for the U.S. to expand trade for farm products – from beef to cotton to fruits and vegetables.”
Stallman said that Colombia has one of the highest tariff structures in South America, which is the major impediment to market access in many sectors, including agriculture.
“Colombian import duties on agricultural and processed food products average roughly 30 percent,” Stallman said. “For South Korea, agricultural tariff rates range from just over 1 percent to nearly 500 percent, depending on the commodity. Eliminating these tariffs through these free trade pacts would be extremely beneficial to U.S. agriculture.”
The Colombian agreement will eliminate tariffs on U.S. agricultural products and correct the current imbalance in agricultural trade between the two countries created in part from congressional passage and extension of the Andean Trade Preference Act (ATPA), according to AFBF.
CTPA allows the United States to become a competitive supplier of agricultural products to Colombia. The United States will be able to export products duty-free and compete with Colombia’s Latin American trading partners who currently supply a large percent of the Colombian food and fiber market through preferential trade agreements.
Under CTPA, more than 80 percent of current U.S. exports to Colombia will become duty-free immediately. Agricultural items that receive immediate duty-free treatment include high quality beef, cotton, wheat, soybeans, soybean meal, apples, pears, peaches, cherries and some processed food products.
An AFBF economic analysis on the agreement estimates the total increase in United States farm exports associated with the CTPA could exceed $815 million per year.
The Korean trade agreement, when fully implemented, would also create opportunities for U.S. agriculture. Exports of major grain, oilseed, fiber, fruit and vegetable and livestock products are likely to exceed $1.8 billion annually, according to AFBF.
Stallman said a critical part of the Korean agreement is for Korea to take further steps to allow all U.S. beef into the market. Prior to the agreement, all U.S. beef had been shut out of the Korean market. Currently the U.S. and Korean beef industries agreed that the U.S. can export to Korea only beef that is less than 30 months of age.
“This is a worthy first step in allowing U.S. beef back into the market and achieving consistency with the World Organization for Animal Health standards,” Stallman said. “However, South Korea must take further steps to allow all U.S. beef into the market, regardless of age and bone material.”
The KORUS FTA allows the United States to become a competitive supplier of agricultural products to South Korea by providing duty-free and reduced tariff access. Lower tariff rates on U.S. products will make the United States more competitive with Australia, China, Japan and other agricultural suppliers to South Korea.
Under the KORUS FTA, almost two-thirds of current U.S. agricultural exports to South Korea will become duty-free immediately. Items that receive immediate duty-free treatment include wheat, corn, soybeans for crushing, hides and skins, cotton and a broad range of high-value and processed products, including almonds, pistachios, bourbon whisky, wine, raisins, grape juice, fresh cherries, frozen French fries and frozen orange juice concentrate.