AFBF and AMI Call for Swift Action on Pending FTAs

US - The inability of Congress and the administration to move three stalled free trade agreements is hurting US economic growth, testified American Farm Bureau Federation President Bob Stallman today before the House Ways and Means Committee. Combined, the Korea, Colombia and Panama agreements would add an additional $3 billion to the US economy through agricultural trade.
calendar icon 26 January 2011
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Once fully implemented, the Korea free trade agreement would trigger $1.8 billion annually in agriculture exports. Gains in exports through the Colombia agreement are estimated at $815 million, while the Panama agreement is estimated to increase US agricultural exports to more than $195 million.

“These trade agreements are not only important to the bottom line of America’s farmers and ranchers but the economic health of our rural communities and the overall US economy,” said Mr Stallman. “There is a long supply chain made up of American workers who get products from the farm gate to foreign consumers. A decline in our exports means a decline in work for those who are a part of that supply chain.”

The Agriculture Department estimates that every billion dollars in agricultural exports supports 9,000 US jobs.

Because the agreements have been stalled for years, a proliferation of trade deals negotiated by US competitors doing business with the three countries have put US agriculture at a disadvantage.

“The debate is no longer simply about generating potential export gains but about how to prevent the loss of existing export markets,” said Mr Stallman, who referenced the billions of dollars being lost in exports to competitors because of the stalled agreements.

For example, from 2000-2009, the Chilean wine market share in Korea rose from 2.4 per cent to 21.5 per cent, while the US share fell from 17.1 per cent to 10.8 per cent. In Colombia, the US overall agriculture peak market share was 46 per cent in 2008, but dropped in 2010 to 21 per cent, being taken over by Argentina.

A recently completed Panama trade deal with Canada threatens to give Canadian exporters a significant competitive edge over the US for products such as beef, pork, beans and various processed foods if the Canadian trade deal enters into effect before the US agreement.

“Inaction has proven to result in loss of market share and forfeiture of economic growth,” said Mr Stallman. “The US government’s inability to move these agreements benefits our foreign competitors while harming US producers and American food supply workers.”

AFBF is urging Congress and the administration to expedite consideration of the three free trade agreements.

AMI also calls for quick resolution to FTAs

“The future prosperity, growth and sustainability of America’s meat and poultry sector is invariably linked to the success we have in expanding our markets abroad.... Unfortunately, time is of the essence, because our competitors are moving quickly to gain market access and consumer loyalty to many of the most lucrative export markets,” said AMI President and CEO J. Patrick Boyle in a submitted testimony to the United States House of Representatives Ways and Means Committee during its hearing on pending free trade agreements with Colombia, Panama and South Korea.

Mr Boyle noted that in 2010, AMI worked closely with the National Pork Producers Council, Iowa State University, ERS, US Meat Export Federation (USMEF) and the USA Poultry and Egg Export Council to derive estimates on the impact of full implementation of these three FTAs on US exports and job creation. Results of the impact study found that passage of the three FTAs currently pending — with South Korea, Colombia and Panama —would represent an additional $2.3 billion in exports and the creation of 29,524 new jobs.

“If we are determined to avoid this opportunity cost while helping to contribute to the President’s National Export Initiative of doubling exports in five years, we must pass, as soon as possible, the pending FTAs with Korea, Colombia and Panama,” Mr Boyle told the Committee. “These three FTAs are the low hanging fruit on the tree, offering a relatively easy growth opportunity that is within our grasp to implement and start realizing benefits immediately.”

Mr Boyle pointed to the recent progress made on the FTA with Korea (KORUS) as a sign of what can be accomplished with perserverance, noting that it is estimated that this agreement, when passed, would result in an additional 8,500 jobs for the poultry industry, 11,000 jobs for the pork industry and 17,000 jobs for the beef industry.

Mr Boyle warned, however, that as this agreement and others await Congressional approval, competitors are taking advantage.

“In the economic times in which we find ourselves, when opportunity knocks, if you do not open your door before your competitor does, then you will miss an opportunity,” Mr Boyle said. “In his first State of the Union address, President Obama correctly insisted that, ‘Jobs must be our number-one focus in 2010.’ We agree with him and believe that this also applies to 2011.”

“Hopefully, Congress will be able to push past the political barriers that have blocked passage of these agreements in the past and demonstrate that our leaders in Washington have enough faith in the determination and ingenuity of the American people to allow us the opportunity to compete fairly in these highly sought after global markets. If Congress fails to do so, American agriculture will lose these opportunities to our competitors in other countries,” Mr Boyle concluded.

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