The U.S. Congress approved a free trade agreement with South Korea Wednesday morning, which could dramatically increase U.S. pork exports to the Asian country.
The agreement is good news for American hog producers, but Canadian pork exports to Korea, worth $100 to $150 million annually, are now officially in jeopardy, says the executive director of the Canadian Pork Council.
“The interest of Korean buyers in Canadian pork is starting to decline … because they see that in a few months Canada will be a second class supplier,” said Martin Rice. “They (U.S. pork exporters) would have a five percent advantage fairly quickly…. That essentially shuts us out.”
Congress voted in favour of free trade agreements with South Korea, Colombia and Panama Oct. 12 after years of negotiations and political lobbying.
Hog producers and lobbyists for the U.S. pork industry likely dusted off and cracked champagne bottles because the American hog sector has championed a free trade arrangement with Korea for many years.
“These trade agreements will be a boon for U.S. pork producers and for the U.S. economy and jobs,” Doug Wolf, National Pork Producers Council president and a hog producer from Lancaster, Wisconsin, told the Des Moines Register.
“Passage of these FTAs is one of the greatest victories ever for the U.S. pork industry.”
The free trade agreement phases out Korea’s 20 percent tariffs on American pork over a 10-year period.
Dermot Hayes, an economist at Iowa State, has estimated the free trade deals with Korea, Colombia and Panama would increase U.S. pork exports by $770 million.
The deal means South Korea now has free trade agreements with the United States, the European Union and Chile, Canada’s three biggest competitors in the Korean pork market.
Consequently, the Canadian government needs to act quickly to revive its free trade negotiations with Korea, Rice said. Otherwise, our producers will be completely shut out of a market that represents 10 percent of Canada’s pork exports.
Rice believes a deal could be done fairly quickly because the two countries have the framework of an agreement in place. He said the auto sector is a remaining sector, which remains concerned that vehicle exports from Korea will damage Canada’s car industry.
