Soybean, wheat groups oppose withdrawal from the Korean-U.S. Free Trade Agreement |

Soybean, wheat groups oppose withdrawal from the Korean-U.S. Free Trade Agreement

Ron Moore
The Hagstrom Report |

NAFTA Negotiations

The second round of negotiations to rewrite the North American Free Trade Agreement will finish Sept. 5 in Mexico City.

Media accounts said negotiators focused on labor, rules of origin and energy matters.

There hasn’t been a word so far about whether the United States put forward a proposal to allow seasonal growers to bring charges of unfair trade practices. The charges could result in antidumping and countervailing duties.

The Florida tomato industry has sought the proposal, but the broader U.S. agricultural establishment is opposed on the grounds that it would be likely to result in retaliation from Mexico and the use of the provision by Mexican agricultural groups to counter imports from the United States.

The American Soybean Association said there could be disastrous consequences if President Donald Trump does withdraw from the Korean-U.S. Free Trade Agreement.

There have been reports Trump is seriously considering withdrawing from KORUS.

“Trade helps our country, Mr. President, and withdrawal from KORUS would hurt us all. As soybean farmers, we benefit greatly from exports, which contribute a $2 billion annual surplus to our nation’s balance of trade,” said ASA President Ron Moore in a statement directed at Trump. “Trade makes our local businesses and our communities stronger. Yet whether it’s South Korea, Mexico and Canada, or our neighbors on the Pacific Rim, we once again find ourselves fighting to communicate the value of trade to farmers.

“With respect to South Korea, we supply nearly half of the 1.3 million tons of soybeans that country imports, with no tariffs as a result of the KORUS agreement. Most of Korea’s soybean imports, however, come from our competitors in Brazil and Argentina. If we withdraw, reinstatement of tariffs will make it hard to maintain our market share and will further increase our competitors’ advantage. And it would be devastating for our U.S. livestock customers who export meat products to South Korea.

“The idea that we’re the only game in town when it comes to selling soybeans or other agricultural products abroad is false. So is the notion that there’s always another country that will buy our commodities. Furthermore, even the threat to withdraw from this or any trade agreement is a dangerous course of action. Repeatedly walking our trade relationships to the brink, or actually breaking them, only weakens our standing abroad.

“As American soybean farmers, we demand that the U.S. remain in KORUS, and that we move forward to negotiate new trade agreements rather than retreating from existing ones. We must expand rather than abandon access to essential overseas markets for the products we produce.”

The American Farm Bureau Federation has said, even though KORUS has not resulted in the increase in U.S. exports to Korea that were anticipated, KORUS has stabilized the market for U.S. farm exports.

“We believe it would be irresponsible to unilaterally walk away from this or any other trade agreement,” said Mike Miller, chairman of U.S. Wheat Associates and a wheat grower from Ritzville, Wash.

“Withdrawing raises the specter of retaliation against agricultural exports and creates unnecessary uncertainty in the market,” Miller said. “Any disruption in the relationship wheat growers have built in Korea over more than 60 years gives Australia, Canada and even Russia an opening to move in and take business away from us at a time when we are all struggling to stay profitable. KORUS, like the North American Free Trade Agreement, has been very good for American agriculture.”

The National Association of Wheat Growers’ President, David Schemm, said it’s good to have negotiations that will benefit agriculture, but it needs to be in a “reasoned and respectful way.”

“We think this trade agreement, negotiated in good faith and strongly supported in Congress, reinforces the administration’s stated goal to sell more agricultural products overseas,” said Schemm, who is a wheat grower from Sharon Springs, Kan. “We support finding ways to improve any agreement, but let’s do that in a reasoned and respectful way, with input from all stakeholders so U.S. wheat farmers can gain greater access to world markets.”

Korea was the third largest volume importer of U.S. wheat in marketing year 2016-17, which runs from June to May.

Business Roundtable President and CEO Joshua Bolten said the business group “opposes any move toward withdrawal from KORUS, and we are communicating that to the administration, members of Congress and governors whose states would be hurt by such a move.”

Bolten pointed to the U.S. economy as a reason against withdrawing.

“More than 366,000 American jobs are tied to U.S. exports to South Korea. Withdrawing from KORUS would significantly disadvantage many successful U.S. exporters, seriously harm many U.S. manufacturers and consumers, and badly undermine broader U.S. economic and strategic interests.”

Trump made the comment before North Korea tested another nuclear weapon on Sept. 3, and analysts said it would be unwise to complicate the U.S. relationship with South Korea by withdrawing from the agreement.