Free trade agreements with Panama, Colombia and South Korea have now been signed by Congress will indeed benefit farmers in Missouri, and across the nation, according to an economist with the University of Missouri Extension.
For evidence that these free trade agreements will increase farm exports, Professor Ron Plain points to this year. He says thanks to earlier pacts like the North American Free Trade Agreement, the U.S. is on pace to set new all-time records for beef and pork exports this year, and the outlook for 2012 is one of potential improvement.
Of the three new FTAs, Plain says the one with South Korea stands out. Before the discovery of bovine spongiform encephalopathy in a single cow in Washington State in December of 2003, that nation was a major importer of U.S. beef with a market approaching $1 billion annually. Plain says for about 3 years after that, virtually no U.S. beef went to South Korea, but that market has been gradually regained. Now, it is one of the top four importers of that product, and he says this agreement should boost that figure.
The components of the agreements will be phased in, lowering tariffs and raising quotes on how much U.S. product can enter each nation. For U.S. beef going to South Korea, the tariff of 40% will be phased out altogether over 15 years. The U.S. Meat Export Federation estimates by the end of that time, South Korea will be buying more than a billion dollars of U.S. beef each year.
Missouri is one of the nation’s top three cow-calf states and one of the top seven pork producing states, so boosts in those two markets will benefit the state perhaps more than most.
As for any future targets for FTAs, Plain says China offers great potential for trade. The Russian Federation has also been a significant customer for U.S. meats, but inconsisitent. He says many in the nation’s farm industry would benefit greatly from pacts with those two nations.
AUDIO: Hear Mike Lear’s interview with Professor Ron Plain, 6:36