NCBA Welcomes President Obama’s Call to Action on U.S. – Korea Trade
President Obama recently directed the United States Trade Representative (USTR) to initiate new discussions with Korea to resolve outstanding trade issues prior to the President’s visit to South Korea for the next G-20 meeting in November. According to USTR, “after the meeting and with those issues successfully resolved,” the President plans to submit the Korea-U.S. Free Trade Agreement (KORUS FTA) to Congress in the following months.
“We’re extremely encouraged that the Administration is making it clear to Congress that it’s time to finally move forward on this critical trade deal,” said National Cattlemen’s Beef Association (NCBA) President Steve Foglesong. “The KORUS FTA could potentially be one of the most significant bilateral agreements in our history.”
If implemented, the KORUS FTA would reduce Korea’s current tariff from 40 percent to zero over fifteen years. The U.S. beef industry would see $15 million in new tariff benefits in the first year alone, with about $325 million in tariff reductions annually once fully implemented. In 2003, U.S. beef producers sold $815 million in beef, beef variety meats and processed beef products to Korea. If KORUS enters into force, Korea could eventually be a one billion dollar market for U.S. beef producers.
With other countries like Australia moving forward on trade agreements with Korea, it’s more important than ever that Congress take immediate action on KORUS. “If Australia were to successfully ratify a similar bilateral trade agreement with Korea a year before we do, it would give the Australians a 2.67 percent tariff advantage over U.S. beef for the next 15 years,” said Foglesong. “This would be devastating to the U.S. beef industry, and sadly, the losses would be of our own doing.”
As demonstrated by the recent agreement allowing China to resume imports of Canadian beef, we can’t afford to sit on the sidelines while other countries move forward on trade negotiations. China represents one of the largest potential growth markets for our industry, worth in excess of $200 million. “The China-Canada beef deal is evidence of the United States’ lack of engagement on trade issues over the past six years,” Foglesong continued. “There’s no reason why American beef producers shouldn’t have the same access to China that Canadians now have.”
Ten percent, or approximately 12 million American jobs, depend on exports. With 96 percent of the world’s consumers living outside U.S. borders, it’s critical that we expand our opportunities to sell beef in the international marketplace if we want to keep American family farms in business.
“With the U.S. economy continuing to suffer, and with other countries outpacing us in the race to ratify new trade agreements, it’s time for Congress to move forward and take action,” said Foglesong. “Every day that passes without progress puts American jobs and market share at risk.”
In addition to KORUS, NCBA is also calling on Congress to move forward on FTAs with Colombia and Panama. For each day Congress delays in approving the Colombia FTA, American exporters overall pay $2 million in unnecessary tariffs.