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Ohio farmers left behind as other nations complete trade agreements

Published Jun. 24, 2011 | Discuss this article on Facebook
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Buckeye Farm News

Pending free trade agreements (FTA) between the United States and Korea, Panama and Colombia would amount to more than $2.5 billion in additional exports, economic development and jobs.

But while the Obama administration and Congress delay action, current American agricultural market share is being cut by other countries. Inaction on the Korea, Colombia and Panama FTAs is resulting in lost agricultural market share and decreased U.S. competitiveness. Farm Bureau is pushing for a congressional vote on all three trade agreements.

For farmers, it’s becoming a matter of earning more money for their products or losing a market altogether.

“The United States exports over $70 billion worth of exports in a given year,” said Adam Sharp, Ohio Farm Bureau Federation (OFBF) senior director of national and regulatory policy. “That’s more than we actually import, which is good for Ohio and good for the U.S.”

For Ohio alone, the agreements would increase the value of agricultural exports by more than $50 million, he said.

The U.S. market is largely open to imports, but other countries continue to slap steep tariffs on U.S. exports.

The trade agreements would allow for increased sales of American corn, soybeans, fruits, vegetables, pork, beef, poultry, dairy and other products.

Korea is the fifth largest trade market in the world. Currently, competitors such as Australia, Chile, Canada and the EU are moving in and taking potential U.S. market share. In Korea, for example, Chile’s market share for wine has increased from 2.4 percent to 21.5 percent, while the U.S. market share has decreased from 17.1 percent to 10.8 percent because U.S. wine imports face a 15 percent tariff. The Chile-Korea FTA eliminated Chile’s 15 percent tariff.

Colombia is the top export market in South America. From 2008-2009, U.S. exports to Colombia have dropped almost 50 percent from $1.6 billion to $907 million and the trend is continuing. U.S. market share in Colombia peaked in 2008 at 46 percent. In 2010 it had dropped to 24 percent.

The United States has a large share, 47 percent in 2010, of the Panama market. But, without an FTA, U.S. competitors are moving in.

Panama has already completed an agreement with Canada, a U.S. trade competitor in exports of beef, potato products and processed foods.

The three pending trade agreements will create a level playing field for American farmers by eliminating the barriers U.S. exporters face in these three markets and increase farmers’ income.

The Korea agreement would bring a $1.9 billion gain for U.S. agriculture exports and would eliminate two-thirds of tariffs immediately. The Colombia agreement would bring a $370 million gain in agriculture exports and would eliminate 80 percent of tariffs immediately. The Panama agreement would bring a $46 million gain in agriculture exports and would eliminate 50 percent of tariffs immediately.

U.S. agriculture currently faces tariffs in Korea of up to 500 percent. The Korea FTA would eliminate those tariffs. Colombia receives duty-free access to the U.S. market because of the Andean Trade Preference Act. Yet, U.S. exporters pay an average tariff of 30 percent to access Colombia’s market. The Colombia FTA would eliminate those tariffs. Panama receives duty-free access to the United States while U.S. agricultural exports face tariffs in Panama of up to 160 percent. This agreement would remove the tariffs.

Get involved

Here are three important steps you can take to let our policymakers know Trade Matters. For more information and resources visit http://bit.ly/fbtrade.

1. Access Ohio Farm Bureau’s online Legislative Action Center to email your U.S. senators and representatives, USDA Secretary Tom Vilsack and U.S. Trade Representative Ron Kirk to encourage their support of the Korea, Panama and Colombia Free Trade Agreements without any further delay.

2. Write a letter to the editor and send it to your local newspaper. See sample letters to the editor about Free Trade Agreements.

3. Discuss the importance of passing these important trade agreements with your U.S. senators and representatives at district meetings or events in June and July or by calling their office.

Trade Facts By the Numbers

  • $2.5 billion - The value of U.S. exports that could be lost as other countries negotiate trade agreements without the United States.
  • $55 million - The value that Ohio exports would increase as the result of the United States passing trade agreements with Korea, Colombia and Panama.
  • 25 percent - The total volume of U.S. farm production that is exported. That number is higher for certain commodities.
  • 9,000 - The number of jobs that is supported by every $1 billion in agriculture exports.
  • 600 - The number of bilateral and regional trade agreements in place or under negotiation worldwide. The United States has a share in fewer than 25 of these deals.

ONLINE EXTRAS:

Visit Ohio Farm Bureau's Online Action Center to contact your legislator about Free Trade Agreements.

Watch Ohio Farm Bureau's Adam Sharp and Ohio Agribusiness Association's Chris Henney describe the impact of trade in a short series of videos.

 



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