FTAs Mean Jobs for Struggling US Economy
US - While three key US free trade agreements (FTAs) are awaiting approval in Washington, the US’ competitors in the red meat arena are moving ahead with their own FTAs to gain competitive advantages in important international markets.
8 September 2011
2 minute read
At stake not only are advantageous tariff rates that will facilitate US exports, but the jobs that go with those exports.
The US has pending FTAs with South Korea, Panama and Colombia. The US Department of Agriculture has estimated that approval of these three FTAs would boost total US agricultural exports $1.9 billion, $371 million and $46 million, respectively. Based on an estimated 8,400 jobs supported by every $1 billion in exports, that amounts to nearly 20,000 jobs associated with those FTAs.
For the US red meat industry alone, it’s projected that the US-South Korea FTA would boost US beef exports to more than $1 billion per year over the 15-year implementation period – up from $518 million in 2010. For pork, exports would more than double by 2016 to more than $400 million.
The benefits of the Colombia and Panama FTAs would add an estimated $25 million in pork exports by 2016 and about $35 million in beef exports.
While the US awaits passage of the FTAs in Washington, the European Union (EU) has implemented advantageous trade agreements with South Korea, Colombia and Peru. At the same time, Canada has agreed on an FTA with Colombia, and Australia and Korea are said to be close to signing an FTA that will benefit Australian beef exports to Korea.
US red meat exports are on a record pace through the first six months of 2011. Beef and pork exports are each projected to top five billion dollars for the first time in history during 2011, barring any significant changes in market conditions.
"A critical factor in the US’ ability to maintain the current pace of exports is ensuring a level playing field internationally," said Philip Seng, USMEF president and CEO.
"If our international competitors are able to gain significant market access and tariff advantages, that will put US products in a very tough position."
Mr Seng noted that in South Korea, for example, duties on beef imports would be reduced from 40 per cent to zero over 15 years while pork duties of 22.5 per cent on chilled product and 25 per cent on frozen would be phased out by 2016. Supplying countries whose duties are eliminated first gain a material benefit that could last for years.
"Our members have been outspoken to us that approving these free trade agreements is the highest priority for our industry," said Mr Seng.
"Congress and the administration have the opportunity to act on these FTAs this fall to keep the US competitive with the EU, Canada and other aggressive competitors."
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