Congress Should Act Now on FTAs
Tuesday, May 17th, 2011
The inability of Congress and the administration to move three stalled free trade agreements is hurting U.S. economic growth, testified American Farm Bureau Federation President Bob Stallman today before the House Agriculture Committee. Combined, the Korea, Colombia and Panama agreements would add nearly an additional $2.5 billion to the U.S. economy through agricultural trade.
Once fully implemented, the Korea free trade agreement would trigger $1.9 billion annually in agriculture exports. Gains in exports through the Colombia agreement are estimated at $370 million, while the Panama agreement is estimated to increase U.S. agricultural exports to more than $46 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 U.S. economy,” said 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 U.S. jobs. By passing all three FTAs, up to 22,500 new U.S. jobs could be created.
While the agreements have been stalled for years, a proliferation of trade deals negotiated by U.S. competitors doing business with the three countries have put U.S. agriculture at a disadvantage. Billions of dollars are being lost in exports to U.S. competitors.
“The U.S. government’s inaction has allowed our competitors to move in and displace agricultural product,” said Stallman. “The debate is no longer simply about generating potential export gains but about how to prevent the loss of existing export markets.”
For example, during the 2000-2009 period, Chile’s market share of Korea’s wine imports rose from 2.4 percent to 21.7 percent, while the U.S. share fell from 17.1 percent to 9.8 percent. This is believed to be the direct result of eliminated tariffs on Chilean wine under the Korea-Chile trade agreement. In Colombia, the U.S. overall agriculture market share, which peaked in 2008 at 46 percent, plummeted to 21 percent in 2010, being taken over by competitors Brazil, Argentina, Uruguay and Paraguay whose agreement went into effect in 2009.
A recently completed Panama trade deal with Canada threatens to give Canadian exporters a significant competitive edge over the U.S. for products such as beef, pork, beans and various processed foods if the Canadian trade deal takes effect before the U.S. agreement.
“Inaction has proven to result in loss of market share and forfeiture of economic growth,” said Stallman. “The U.S. government’s inability to move these agreements benefits our foreign competitors while harming U.S. producers and American workers.”
AFBF is urging Congress and the administration to expedite consideration of the three free trade agreements.
American Farm Bureau