Congress passes three free-trade agreements on bi-partisan vote
After several years of dithering, discussion and delay, Congress swiftly passed three free-trade agreements Oct. 12, only a few days after they were sent up to Hill from the White House. Many farm groups and politicians hailed the Panama, Colombia and South Korea free-trade agreements, saying they would benefit U.S. farmers and the agricultural economy as a whole.
The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) applauded the trade agreements, noting that they will expand U.S. dairy exports and create thousands of export-supporting jobs in the dairy industry. Jerry Kozak, president and chief executive officer of NMPF thanked President Obama and his trade team, along with leaders in both houses of Congress "who worked hard in recent months to make these favorable votes possible."
Tom Suber, president of USDEC, said he hoped that all the necessary steps will be taken in the coming months by all four countries so that the agreements will take full effect by the beginning of the year "so benefits to the U.S. economy can begin to be felt immediately."
Kozak said dairy producers are excited about the new export opportunities that will flow from the new trade agreement. "The export gain for dairy from the Korea FTA in the first few years after implementation will be approximately $380 million per year, on average, and the gains from the Colombia and Panama FTAs will add another $50 million annually."
Suber pointed out that the agreements will not only help expand export sales for cheese, whey, skim milk powder and other dairy products, they will also prevent foreign competitors from taking market share that the U.S. industry has developed in each of the countries. "In international trade, unless we continue to move forward, we risk falling behind our competitors," he said. "These agreements will ensure that, for America's dairy farmers and processors, export sales will continue to expand, not contract."
Kozak estimates that as many as 10,000 additional jobs, both on and off the farm could be created by the Korea agreement alone," he said.
Bob Stallman, president of the American Farm Bureau Federation said the new trade agreements are welcome news for U.S. farmers and ranchers. "Over the past four years, Korea, Colombia and Panama have opened their doors to our competitors," Stallman said. "Congress and the administration have now given us the opportunity to improve our competitive position in these markets. The economic growth generated from the agreements will improve our economy and create jobs here at home."
Stallman said that the three agreements represent nearly $2.5 billion in new agriculture exports for America's farmers and are expected to create economic growth that could generate support for up to 22,500 U.S. jobs.
Now that Congress has approved all the components of the trade package, swift implementation is critical, to restore a level playing field for U.S. farm exports to these three nations, Stallman said.
Wisconsin Farm Bureau president Bill Bruins was also happy to hear the trade agreements, which had been stalled for years, had finally been passed. "This is great news for Wisconsin's economy and agriculture," he said.
Bruins said the three bi-lateral trade agreements expand trade access for beef, dairy, processed foods, corn, soybeans, wheat, fruit, vegetables, pork and other livestock.
"Wisconsin agriculture is really the big winner with the passage of these trade agreements," Bruins said. Over $60 million in additional direct exports and upwards of $100 million in indirect exports of Wisconsin's agricultural products are expected to be achieved each year. Exports are important in growing Wisconsin's agricultural economy.
The increase in export sales and job creation will help contribute to a more robust and competitive agricultural economy, Bruins said. "Farmers in Wisconsin will see direct benefits in their farming operations and communities because of these trade agreements. A global market place is waiting for our Wisconsin goods and we are ready, able and willing to meet the demand," he added.
An alternate view came from the National Family Farm Coalition, which expressed "deep disappointment" at the approval of the free trade agreements. "The U.S. alone has lost 300,000 family farmers since NAFTA was implemented, and we don't expect the lowered tariffs for beef and oranges to offset those numbers in the next 15 years," said the organization's board president Ben Burkett.
Wisconsin farmer John Kinsman, who met with President Obama and Agriculture Secretary Tom Vilsack at the White House Rural Forum in Iowa, was particularly disheartened.
"We outlined our concerns about the trade agreements to the President and Secretary Vilsack, but they chose to ignore them. This administration has, unfortunately, caved to the notion that any trade is good trade," said Kinsman. "They abandoned their campaign pledge to revisit our nation's trade policies, despite the continued loss of family-scale producers and the rural communities behind them."
The coalition was one of 57 farm, fishing, food, faith, and social justice organizations that signed a Sept. 14 letter to members of Congress urging opposition to all three trade agreements, demanding 'fair trade, not free trade.'
NFFC board vice president Dena Hoff noted, "The Korean Peasants League calculated that South Korea will lose nearly half of its agricultural production and its farmers, so their rural communities will decline just as those in the U.S. have. Instead of supporting localized food production and food sovereignty, the plan is to export highly processed foods that simply add to the pockets of transnational corporations."
Additional concerns of the coalition included Colombia's human rights abuses and Panama's tax-haven status. "This is morally wrong," said Hoff.
Members of Wisconsin's Congressional delegation voting in favor of all three trade agreements were Senator Ron Johnson (R) and Congressmen Sean Duffy (R-7th), Ron Kind (D-3rd), Tom Petri (R-6th), Reid Ribble (R-8th), Paul Ryan (R-1st) and Jim Sensenbrenner (R-5th). Senator Herb Kohl (D) voted for the Panama and South Korea agreements.
Senator Johnson said he was pleased to support the three trade agreements. "They represent a genuine, bipartisan step that Congress can take to encourage self-sustaining, private sector job growth," he said.
"Hundreds of thousands of Wisconsin jobs are supported by exports. The three agreements approved by Congress will eliminate barriers to sales of American products abroad," Johnson said. "They ensure that American workers - whom I believe are the most skilled and productive in the world - can compete more fairly in several critical markets. They will promote American job growth by increasing our exports by billions of dollars."
Rep. Ribble said the passage of the trade agreements will "create new jobs and expand market access for many Wisconsin industries." The agreements will "level the playing field for many businesses that were previously shut out of these vital markets," he added.
Governor Scott Walker praised Congress for approving the three free-trade deals. "Thousands of Wisconsin employers rely on world markets to sell their products," he said. "The trade agreements that were passed with bipartisan votes in Congress will improve the global marketplace for Wisconsin products and help our economy grow." The three countries represent growing markets for Wisconsin exports, he added.
Walker quoted U.S. Chamber of Commerce figures showing that exports support over 65,000 jobs in Wisconsin. According to the Department of Commerce, over 6,800 companies export products from Wisconsin, he said.
Walker's office said that between 1997 and 2010, Wisconsin exports to Colombia grew 416 percent, to Panama they grew 190 percent and to South Korea they grew 82 percent.
"The passage of the Korea, Colombia, and Panama trade agreements is wonderful news that will have a huge benefit to Wisconsin agriculture," said Ben Brancel, Secretary of the Department of Agriculture, Trade and Consumer Protection. "These agreements clarify the food safety inspection requirements and provide a more competitive playing field for Wisconsin exporters. The agreements will allow Wisconsin companies greater access to international markets to grow their businesses and create jobs."
In 2010, Wisconsin exported $93 million worth of agricultural products to Korea, ranking it as the fifth largest agricultural export market for the state. With this agreement, Wisconsin will have improved access to Korea's $1 trillion economy and 49 million consumers, Brancel said.
As the third largest economy in Central and South America, Colombia is a significant international market for Wisconsin products, he added. Last year the top Wisconsin agricultural exports to Colombia were milling products, sweet corn, bovine semen, prepared foods and rice.
With the Panama trade agreement, Wisconsin will have additional opportunities to export dairy products, corn, beef, soybeans and soybean products. The agreement will immediately eliminate duties on nearly 50 percent of current U.S. exports Brancel said.
Wisconsin agricultural exports hit a record high in 2010 with a total value of $2.4 billion, up 36 percent from 2009. Wisconsin ranks 17th in the nation for agricultural exports with customers in over 130 countries, Brancel said.
David Adams, president of the Wisconsin Corn Promotion Board, said all three trade agreements provide significant opportunities for U.S. agriculture by immediately eliminating import duties on the vast majority of U.S. agricultural commodities, such as corn and the distillers' grains from ethanol plants.
Adams, a Lake Geneva farmer, noted that the USDA's Foreign Agricultural Service statistics show that Wisconsin feed grain exports (to all countries) totaled $379 million of the total $2.2 billion in agricultural products exported during 2009.
"Each of these countries is an important market for corn and distillers' grains for feed, and the FTAs offer significant opportunities for growth," Adams said.
But even with implementation of the trade agreements, he said, the Wisconsin Corn Promotion Board, partnering with the U.S. Grains Council, will have to "immediately re-engage and work aggressively" to rebuild U.S. partnerships with the Colombian officials, trade authorities and end users to regain market share that has been lost in recent years. Colombia, he said, is one of the fastest growing economies in South America for coarse grains.
