Industry welcomes U.S.-South Korea FTA

Industry welcomes U.S.-South Korea FTA    U.S. industry groups praised the U.S. and South Korean governments on Friday for reaching consensus on a long-awaited bilateral free trade agreement, and are looking forward to reaping the benefits upon ratification.
   'With Korea as our seventh-largest trading partner, the reduction and elimination of tariff and non-tariff trade barriers will provide greater market access for a wide range of U.S. companies, service providers and agricultural producers — helping to increase U.S. exports and economic growth,' said Chuck Dittrich, National Foreign Trade Council's vice president for regional trade initiatives, in a statement.
   The White House said the deal would increase annual exports by as much as $11 billion and support at least 70,000 domestic jobs. An original trade pact between the two countries has stalled for almost three-and-a-half years in the face of opposition in Congress over what was perceived as inadequate market access for U.S. auto manufacturers and beef producers.
   The agreement improves market access for U.S. automakers by addressing ways that Korea's system of automotive safety and environmental standards have served as barriers to U.S. exports.
   The pact also opens up Korea's $560 billion services market in areas such as financial services, energy and distribution.
   The U.S. Meat Export Federation said it plans to reap a boost in red meat sales to Korean importers, food service, retailers and consumers once the free trade agreement takes effect.
   According to the federation, through the first nine months of 2010, the United States has exported 81,866 metric tons (180.5 million pounds) of beef valued at $383.8 million to South Korea — an increase of 136 percent in volume and 181 percent in value versus the same period in 2009. Pork exports to Korea are down about 17 percent year-over-year, but still total 64,209 metric tons (141.6 million pounds) valued at $136.5 million.
   The U.S.-Korea Free Trade Agreement (KORUS FTA) would also create big opportunities for U.S. soybean and poultry exports.
   For example, the FTA offers immediate duty-free access to U.S. soybeans for crushing into U.S. soybean meal. And for the first time, producers of U.S. food-grade soybeans would have access to the South Korean market outside of the import monopoly created by the Korean State Trading Enterprise. Tariffs on refined soybean oil would be eliminated over five years, and tariffs on crude soybean oil would be eliminated over 10 years.
   'Domestic demand for U.S. soybean meal will also increase because this agreement is expected to generate millions of dollars of new meat and poultry exports,' said American Soybean Association President Rob Joslin. 'Domestic livestock consumed 28 million metric tons of soybean meal in 2010, using nearly 80 percent of all the soybean meal processed in this country.'
   In 2009, South Korea imported $449 million worth of soybeans, soybean meal and soybean oil from the United States. The South Korean market is now the fifth largest for U.S. agricultural exports, valued at $3.9 billion in 2009. According to economic analysis by the American Farm Bureau Federation, the KORUS FTA would expand those exports in a wide range of commodities and result in $1.8 billion in additional sales, a 46 percent increase.
   The American Apparel & Footwear Association and the United States Council for International Business, which represents top global companies, also welcomed the deal.
   Industry groups are now urging both the Congress and Obama administration to move swiftly on ratifying the FTA by the end of the year.
   'The business community pledges to do its utmost to secure swift congressional approval of this agreement which will lead to growth and jobs in both countries,' said Harold McGraw III, head of The McGraw-Hill Cos. and chairman of the U.S. Council for International Business (USCIB).
   The industry groups hope expeditious ratification of KORUS FTA will help break the gridlock on furthering FTAs already negotiated by the U.S. government with Colombia and Panama.
   The U.S. wheat industry, led by associations such as the National Association of Wheat Growers (NAWG) and U.S. Wheat Associates, is particularly concerned with immediate passage of the Colombia agreement, without which a market share of 70 percent is at risk, particularly from Canada, which recently negotiated its own FTA with the country.
   While the Korea agreement would have less impact on the wheat industry, it is seen as a 'linchpin' for movement of any of the accords and any new agreements negotiated in the future, NAWG said.
   'We encourage the Obama administration to capitalize on this progress to further reinvigorate U.S. trade policy across the board,' said USCIB President and Chief Executive Officer Peter M. Robinson. 'For too long, we have waited on the sidelines while others have moved ahead.    We have a lot of catching up to do.' ' Chris Gillis Eric Kulisch contributed to this story