The American Soybean Association (ASA) expresses appreciation to President Barack Obama and his team of negotiators who brought a successful conclusion to a United States-Korea Free Trade Agreement (KORUS FTA) that would create landmark opportunities for U.S. soy, meat, and poultry exports. ASA leaders are now urging Congress to swiftly vote approval of the necessary implementing legislation for this historic free trade agreement.
“Soybean farmers greatly appreciate the work of U.S. negotiators who concluded a trade agreement that achieves ASA’s objectives,” said ASA President Rob Joslin, a soybean farmer from Sidney, Ohio. “ASA has provided input to the U.S. Trade Representative and U.S. Department of Agriculture regarding the benefits of the FTA with Korea for a number of years. Now the Congress needs to approve this agreement as soon as possible.”
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.
“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,” Joslin said. “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.”
Soybeans are the second largest commodity in the United States in terms of annual acreage and value, with 78 million acres planted and a farm-gate value of over $32 billion in 2010. Soybeans and soybean products are the most important U.S. export commodity, with sales exceeding $21 billion last year. This represented over 50 percent of U.S. soybean production and 21 percent of total U.S. agricultural exports in 2009.
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.
“ASA advocates negotiation of trade agreements that significantly improve access to foreign markets for U.S. soy and livestock products,” Joslin said. “Ratification of this trade agreement with Korea is long overdue, as are the trade agreements with Colombia and Panama that have been awaiting action for more than three years.”