CONGRESS is creating "a nightmare" for the US agriculture sector specifically and for the entire US economy because of its refusal to act on three free trade agreements (FTAs), according to agricultural leaders and other sources.
At stake are not only more robust trade and stronger prices for US crop, livestock and poultry producers but also thousands and thousands of jobs for Americans, those sources have said.
For more than three years, US trade agreements with Colombia, Panama and South Korea have sat on congressional shelves; the pacts were negotiated by the Bush Administration to open up markets in those countries.
The FTAs would decrease and gradually eliminate tariffs on US goods - agricultural goods and products across US commerce - to those three countries, which already have nearly duty-free access to the US.
An analysis of the three FTAs released by the American Meat Institute (AMI) last month shows that the agreements, once fully implemented, represent "immediate and substantial opportunities" for growth in US beef, pork and poultry revenues and jobs in the meat and poultry sectors.
AMI said the breakdown was startling.
For beef, sales to Colombia, Panama and Korea would increase from $218.9 million now to $1.638 billion, and 18,022 jobs would be created in the beef industry - from jobs in production and processing to distribution, sales and wholesaling.
For pork, sales would increase from $192.5 million now to $964.5 million, and 10,293 jobs would be created.
For poultry, sales would increase from $61 million now to $163 million, and 1,209 jobs would be created.
Altogether, just for beef, pork and poultry trade, sales would increase from $472.4 million today to $2.766 billion, and 29,524 jobs would be created.
It's often difficult to get one's head around industry-wide totals in the millions and billions of dollars, but the National Pork Producers Council (NPPC) has calculated effects of the FTAs into what they mean per animal for producers.
Citing an analysis by Iowa State University economist Dermot Hayes, NPPC said the Colombia FTA would increase hog prices by $1.34 per head, the Panama FTA would add 20 cents per head to that and the Korea FTA would add fully $10 per head to that. NPPC said Hayes' calculations put the total value of the three FTAs to individual pork producers at $11.54 per head.
That additional business is what creates those 29,524 new jobs, many of which would be unionised, sources have said, noting that this is one of the ironies of congressional inaction in that unions are generally opposed to FTAs, and that opposition has held back congressional support.
Great fear
If Congress doesn't get on with ratification of the three pacts, "it will be a nightmarish scenario" for livestock and poultry producers and other US manufacturers, according to Jong Hyun Choi, economics minister to the Korean embassy in Washington, DC.
Speaking to a news conference at the World Pork Expo in June about the Korea-US agreement, he said the FTA represents "a tremendous opportunity" for US producers.
However, he said Korea is implementing an FTA with the European Union that will give producers in those 27 countries duty-free access to the Korean market and is negotiating FTAs with Canada, Australia, New Zealand and Japan.
He warned that these agreements do not suggest that US meat and poultry producers and other businesses will have more competition in Korea but that the US simply won't be in the Korean marketplace.
NPPC vice president and counsel for international affairs Nick Giordano explained that without the Korea-US FTA, US producers still will have tariffs on their products entering Korea, while signers to the Korea-EU FTA and other Korean trade pacts will have no tariffs.
American pork producers are the lowest-cost producers in the world but "cannot compete with zero tariffs," Giordano said, and "not moving forward" to implement the FTAs with Korea and others will be costly to all industries in the US.
The FTAs represent "an economic stimulus package that's waiting to happen," he said.
Colombia and Panama also are negotiating FTAs with other countries. Canada and Colombia have now signed an FTA that provides all kinds of Canadian companies with duty-free access to Colombia, a coalition of 42 agricultural organisations said in a letter to Congress two weeks ago.
The letter pointed to President Barack Obama's call, in his "State of the Union" address in January, for the US to double exports over the next five years and to Obama's recent statement that he wants the Korea-US FTA ready to sign this November.
The letter said, though, other countries are acting more quickly to develop their own pacts with Colombia, Panama and Korea. Citing the Canada-Colombia FTA, it said "one of our greatest fears" concerning continued delay in implementing the three FTAs "is now being realised" in that the US is not only failing to access markets but is getting shut out of them.
"The fact is," the letter said, "literally hundreds of FTAs are being negotiated around the world, and global trade liberalisation is taking place. However, it is taking place with the US standing on the sidelines."
Obama recently created a new export promotion council and named 20 corporate chief executive officers to it to help him "find new growth streams" - new markets and opportunities - outside the US where, he noted, the world's fastest-growing markets and 95 per cent of the world's population exist.
It's important for the US to step up its trade agenda to serve those markets and people, AMI president and CEO J. Patrick Boyle said, because if the US is not there, other exporting nations will be.
Here's the point
TRADE works. Over the last 20 years, the US has successfully negotiated trade agreements with neighboring Canada and Mexico and with countries around the world, and every agreement has opened markets that had been closed or had restricted US access with expensive tariffs and other trade barriers.
The Figure shows how dramatically exports grow following trade pacts.
In agriculture and other industries, trade builds business, but trade also creates jobs - thousands of jobs. Indeed, government and industry economists have projected that 12,700 jobs are created for every $1 billion in beef exports, 13,333 jobs are created for every $1 billion in pork exports and 11,853 jobs are created for every $1 billion in poultry exports.
These are jobs across the food production, marketing and distribution systems, and the economic benefit spills over into jobs in towns.
This is why trade is important to everyone, and this is why agriculture has urged President Barack Obama and Congress to implement three trade agreements that were negotiated with Colombia, Panama and South Korea.
The urgency is necessary because other countries are putting together trade agreements with these and other countries, and if the US waits too long, it will be on the outside of the trade window looking in, losing opportunities to build businesses and create jobs.
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