Three years ago the US and S. Korea produced a free trade deal that the US never ratified. Now, there's a new deal, Gary Crawford has the details:
"The United States and South Korea have reached agreement on a landmark trade deal between our two countries."
President Obama a few days ago announcing that the negotiators have finally worked out changes to the free trade agreement that had been agreed to three years ago but which was never ratified because of:
1. Continued controversy over limited access for US automobiles in the S. Korean market, and
2. Continued restrictions on US beef, limiting beef allowed in to meat from animals under thirty months of age... some other limits on beef as well.
President Obama told reporters, even though the beef restrictions are not eliminated in the proposed new agreement: "This deal is a win for our farmers and ranchers and will increase exports of American agricultural products..."
How would that happen? US Trade Representative and Chief Negotiator Ron Kirk told law makers under the original deal and under this one, too:
"Two-thirds of our tariffs on agriculture go away immediately... and many of them will be phased out over ten years." - making US products more affordable in the Korean market.
But even without a free trade agreement currently in effect now with S. Korea: "Korea is a very important market to our livestock and poultry industry..." Agriculture Department Livestock Analyst Shale Shaggun told us that Korea is our fourth largest market for beef, fifth largest for pork, 12th market for US broilers. In fact, our beef exports are running a 130% higher than this time a year ago, broilers a 150% higher.
"To some extent they have seen some recovery in their economies and the dollar is relatively weak which tends to favor exports..."
And even with US meat exports to Korea already running very well, and even though it appears the trade agreement hammered out recently does not mandate Korea immediately easing its restrictions on beef, Shagun says IF the two nations do ratify that free trade agreement:
"There will be opportunities for the US to increase their exports as the tarifs come down... also, to the extent that it does lay out a framework for resolution of disputes, it is beneficial for US exports."
But of course, US legislators and those in Korea as well, have to OK this new free trade deal. A few months ago, Montana Senator Max Baccus, who heads up the powerful Senate finance committee - serves on the Ag committee, too, told US Trade Representative Ron Kirk that an agreement that does not have Korea lifting all restrictions on US beef might have a tough time getting through the Senate ratification process. "I don't know why I should schedule a hearing on a Korean FTA that does not include all beef, all ages, all kinds."s
So, we'll see what happens when the new congress gets to work in the New Year.
Gary Crawford - Washington