Approving the Korea-US FTA would boost total US agricultural exports by $1.9 billion, the US Department of Agiculture has estimated. Approval of the US-Panama Trade Promotion Agreement and the US-Colombia Trade Promotion Agreement would increase ag exports by $371 million and $46 million, respectively. These FTAs will help create nearly 20,000 sorely needed US jobs, based on an estimated 8,400 jobs supported by every $1 billion in exports.
US beef exports are projected to be boosted to more than $1 billion per year over the 15-year implementation period by the US-South Korea FTA. US pork exports would more than double by 2016. The Colombia and Panama FTAs would add an estimated $35 million in beef exports and about $25 million in pork exports by 2016.
Ratifying the FTAs has taken on an even greater sense of urgency now that key competitors are moving forward on trade agreements of their own, Miller said. The European Union (EU) has recently implemented advantageous agreements with Korea, Colombia and Peru, while Canada has also implemented an FTA with Colombia.
Australia, which is the US’ largest competitor in the Korean beef market, is believed to be very close to finalizing an FTA with Korea that Miller said would provide a price advantage for Australian beef exports. Currently totaling 40 percent, Korea’s duties on beef imports would be reduced to zero over a 15-year timetable under these trade agreements. As a result, the supplying country first to have its duties reduced will have a price advantage that will last for many years.
Despite import duties that are as high as 30 percent in Panama and 80 percent in Colombia, US beef has made initial inroads into these markets. Through June, year-over-year beef exports to Panama are up 36 percent in value to $2.2 million, while exports to Colombia have more than tripled to $1.9 million. The FTA with Panama would immediately eliminate duties on Choice and Prime cuts and some offal items, while phasing out most other duties over 15 years. The FTA with Colombia would open the market to an unlimited volume of duty-free Choice and Prime cuts while establishing a duty-free quota for variety meats and other muscle cuts.
Pork exports to these countries are equally as promising, having reached $8.7 million in Colombia and $4.6 million in Panama so far this year. Colombia’s pork duties range from 20 to 30 percent, and would be eliminated by the fifth year of the agreement. Panama’s duty on most pork muscle cuts is 70 percent, but would be reduced to zero on imports falling within a new duty-free quota.