The Free Trade Agreement (FTA) between the United States and South Korea will be operational on March 15. The news of the deal’s implementation comes after trade officials tied up legal loose ends in recent days.
The South Korea FTA, which officials claim will mean well over 60 percent of U.S. exports will enter the nation duty-free, is one of three passed by Congress late in 2011. The other trade deals – with Colombia and Panama – are expected to be en force by summer’s end.
For more on Congress’ passage of the FTAs, see here.
Among commodity groups cheering the FTA’s completion is the American Soybean Association (ASA). Among the U.S. exports eligible for duty-free status are “soybeans for crushing and U.S. soybean meal,” said the ASA in a statement. “Additionally, U.S. food-grade soybean producers will have access to the South Korean market for the first time outside of the import monopoly created by the Korean State Trading Enterprise. The implementation of the agreement will also trigger the gradual elimination of tariffs on refined soybean oil over five years, and the elimination of tariffs on crude soybean oil over 10 years.
Steve Wellman, ASA president, said “This free trade agreement creates landmark opportunities for soybeans and other U.S. agricultural exports, including meat and poultry. Trade agreements that significantly improve access to foreign markets for these products are a main focus of ASA’s efforts in Washington, and we appreciate the efforts of the (Obama) administration, the Office of the U.S. Trade Representative, and USDA in seeing the free trade agreement with South Korea enacted next month.”
In 2011, the ASA pointed out, “South Korea imported $362 million worth of soybeans and soy products from the United States, making it the eighth largest U.S. soybean export market. South Korea also purchased $1.2 billion in meat products from the United States in 2011, making it a large and growing market for U.S. meat producers.”
J.D. Alexander, President of the National Cattlemen’s Beef Association, said once the FTA is implemented, “our competitive advantage will be secured. The pact will phase out tariffs on U.S. beef over the next 15 years and will make U.S. beef a more affordable and appealing choice for our valued Korean customers. This may very well be the most monumental bilateral trade pact our industry has ever witnessed.
“With increasing demand and tightening supplies, movement of the FTA should encourage cattlemen and women to think beyond the current prices for live cattle and think long term. Think about where demand is heading and look beyond the borders of the United States. Now is the time to retain heifers and rebuild what has now become the smallest U.S. cowherd more than five decades. In order to meet increasing demand, we have to have the beef. Now is the time.
“Ten percent, or approximately 12 million American jobs, depend on exports. With 96 percent of the world’s consumers living outside U.S. borders, it’s critical that we expand our opportunities to sell beef in the international marketplace if we want to keep American family farms in business.”
For full FTA coverage, see here.