Trade an important tool for the livestock sector

United States Trade Representative Ron Kirk announced Tues., Feb. 21, 2012, that the free trade agreement between the United States and South Korea (KORUS FTA) will be implemented on March 15, 2012.

National Cattlemen’s Beef Association (NCBA) President J.D. Alexander praised the announcement.

“When the KORUS FTA is implemented, our competitive advantage will be secured. The KORUS pact will phase out a 40% tariff on U.S. beef over the next 15 years, which will result in more Korean consumers buying more U.S. beef at a more affordable price,” Alexander said. “This may very well be the most monumental bilateral trade pact our industry has ever witnessed.”

Alexander said while the immediate effects of increased exports are positive for cattlemen, he urged them to think long term about the effects increased demand will have on already tight beef supplies.

“With increasing demand and tightening supplies, movement of the KORUS FTA should encourage cattlemen and women to think beyond the current prices for live cattle and think long term,” he said. “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.”

According to Alexander, implementation of the KORUS FTA and expanding opportunities to sell U.S. beef in other international markets is critical to the sustainability of family farms and rural economies.

“Approximately 12 million American jobs, depend on exports. With 96% 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,” Alexander said.

The pork industry stands to benefit considerably from KORUS and other FTAs. The trade deals with Colombia, Panama and South Korea that were approved last fall, when fully implemented, will generate nearly $772 million in new pork sales, add more than $11 to the price producers receive for each hog marketed and create more than 10,000 pork industry jobs, according to Iowa State University economist Dermot Hayes.

“It was extremely important that we approved these FTAs now,” said Doug Wolf with the National Pork Producers Council. “Because while these deals have languished for more than four years, our competitors have negotiated their own trade agreements with Colombia, Panama and South Korea, and the United States has lost market share in those countries.”

The U.S. livestock industry was instrumental in getting the trade agreements approved, particularly the deal with South Korea.

“America’s pork producers are grateful to the Obama administration’s trade team, including U.S. Trade Representative Ron Kirk, and to Congress for getting the trade agreements done,” Wolf said.

Exports are vital to the U.S. pork industry, which last year shipped nearly $4.8 billion of pork, an amount that added about $56 to the price producers received for each hog marketed.

Now efforts are being directed toward a FTA with the European Union and the Trans-Pacific Partnership (TPP), a multilateral trade agreement. Japan recently announced its intention to join the TPP negotiations, which previously included Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam.

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