Free Trade Agreements
Cattlemen support expanding export opportunities for U.S. beef and are grateful to Congress for ratifying and President Obama for signing the free trade agreements with South Korea, Panama and Colombia. NCBA has been working for five years to bring these agreements to fruition and established its reputation in Washington as a key player on the trade agreements. On Oct. 12, 2011, the House and Senate voted overwhelmingly in support of all three trade agreements. All three agreements were signed into law by President Obama on Oct. 21, 2011.
See how your elected officials voted:
H.R. 3078: United States-Colombia Trade Promotion Agreement Implementation Act
H.R. 3079: United States-Panama Trade Promotion Agreement Implementation Act
H.R. 3080: United States-Korea Free Trade Agreement Implementation Act
Summary of Free Trade Agreements
The free trade agreements offer great potential to increase market share in key markets for U.S. beef in Asia and South America. In fact, according to the International Trade Commission, the three agreements translate into 250,000 jobs. For cattlemen, the trade agreements increase beef demand and profitability. These agreements give U.S. beef a foothold in growing markets in two continents, Asia and South America. Now that the free trade agreements have been implemented with Colombia and Panama, the U.S. will ultimately have free trade for U.S. beef with approximately two-thirds of the population in the Western Hemisphere.
- Demand for U.S. beef in Korea is strong. U.S. beef sales in Korea exceeded $582 million in 2012.
- In previous years the greatest hindrance for U.S. beef was the 40 percent tariff on U.S. beef imports.
- Fortunately, the Korea-United States (KORUS) free trade agreement took effect on March 15, 2012, beginning the 15-year repeal of the 40 percent tariff on U.S. beef, allowing us to sell more U.S. beef to Korean consumers at a more affordable price.
- Today, U.S. beef is still limited to animals slaughter under 30 months. As consumer confidence grows in Korea that age-based restriction may change in future consultations.
Because the United States reached an agreement with Korea before Australia, our beef producers will have a 5.34 percent competitive advantage over U.S. beef for 15 years.
- Colombia is an important market for U.S. beef and beef variety meat exports. Prior to the free trade agreement, Colombia placed an 80 percent tariff on U.S. beef imports, making it one of the highest tariffs on U.S. beef in the world.
- The Colombia Trade Promotion Agreement (CTPA) was implemented on May 15, 2012. This agreement immediately provided duty free access for high quality U.S. beef, reduced tariffs on all other beef and beef products over 15 years, and for the first time ever, put American beef on a competitive footing with beef imports from Brazil and Argentina.
- In 2009, the United States exported approximately $436,000 of beef and beef products to Colombia, a paltry sum considering the 80 percent duties. We look forward to expanding U.S. beef sales into Colombia.
- Another important part of the CTPA is this agreement provides assurances for a stable export market through plant inspection equivalency. It also fully reopens the Colombian market to U.S. beef by assuring that Colombia adheres to the World Organization for Animal Health (OIE) guidelines related to BSE.
- The United States and Panama concluded negotiations on a free trade agreement on Dec. 19, 2006. Panama agreed to accept imports of all U.S. beef and beef products. This agreement took effect on October 31, 2012.
- Upon implementation, the 30 percent tariff on prime and choice cuts was immediately eliminated and the duties on all other cuts will be phased out over 15 years.
- Like the CTPA, the agreement with Panama provides assurances for a stable export market through plant inspection equivalency and Panama also modified its import requirements related to BSE to be consistent with international standards.