The American Soybean Association (ASA) is welcoming the Obama Administration's commitment to remove remaining obstacles and secure Congressional approval of the United States-Korea Free Trade Agreement (KORUS FTA) that was signed on June 30, 2007.
At the G-20 summit in Toronto this past weekend, President Barack Obama signaled his intention to set a deadline for removing outstanding obstacles to the implementation of the agreement and gain Congressional approval of the deal in 2011. U.S. Trade Representative Ron Kirk will be tasked with negotiating with his Korean counterpart to work out the details by the next G-20 meeting, which will be held in Seoul, South Korea, in November.
"The free trade agreement with South Korea would provide landmark opportunities for U.S. soy, meat, and poultry exports," said ASA President Rob Joslin, a soybean producer from Sidney, Ohio. "The agreement is very positive because it will further open South Korea's market to U.S. exports of soybeans and soy products."
The agreement offers immediate duty-free access to U.S. soybeans for crushing and to 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 5 years, and tariffs on crude soybean oil would be eliminated over 10 years.
"U.S. soybean growers will also benefit because this agreement is expected to generate millions of dollars in additional exports of meat and poultry," Joslin said. "Domestic livestock consumed more than 24 million metric tons of soybean meal in 2009, which was 70 percent of all the soybean meal processed in this country."
The agreement has been awaiting action by Congress on the necessary implementing legislation. That legislation has been held up by demands from some lawmakers that improvements be made to the agreement in certain sectors, including automobiles.
"ASA is encouraged that the President's deadline will motivate negotiators to resolve any outstanding issues," Joslin said. "Ratification of this trade agreement is long overdue."
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 Korea FTA would expand those exports in a wide range of commodities and result in $1.8 billion in additional sales – a 46 percent increase.
"ASA supports negotiation of trade agreements that significantly improve access to foreign markets for U.S. soy and livestock products," Joslin added. "U.S. soybean farmers benefit from free trade because more than half the value of the U.S. soybean crop is exported annually."
The KORUS FTA is one of three that are pending approval by Congress. Agreements with Colombia and Panama also have been awaiting action for more than three years. ASA is calling for action on all three FTAs, pointing out the enormous risk of letting other countries move forward first.