This morning the number two man in the South Korean embassy in Washington spoke to reporters here at the World Pork Expo, pushing the importance of the Korean-U.S. free trade agreement.
That agreement was signed three years ago and would, according to one Iowa State University economist, lead to a gain of U.S. $10 per head if it gets approved by congress. That’s a lot of extra per pig profit, if the economist is right.
Unfortunately for American hog producers, congress won’t pass the agreement. Ever since the American economy went rancid, free trade has become generally unpopular with Americans, and extremely unpopular with the interest groups that are the bedrock of the Democratic party and the Barack Obama administration – especially labour unions.
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At the same time, Canada has been talking with South Korea about getting our country free trade with them as well, so I wonder what this all means for Canada and Canadian pork sales. Nick Giordano, the American National Pork Producers Council trade expert, argued passionately about the importance of approving the South Korea agreement, and warned darkly about the U.S. totally losing the South Korean market – now receiving 100,000 tonnes per year of American pork – if a deal isn’t soon approved. That’s because Chile has already made a free trade agreement and Chilean pork is pouring into South Korea. If other countries also get FTAs, the U.S. could be shut out. Right now U.S. pork faces a 20 percent-plus tariff.
I just spoke with Karl Kynoch of the Manitoba Pork Council, who is here at the show, and he says he wants to see the American deal go forward because anything that allows more North American pork to flow offshore is good for Manitoba hog producers. If American pork is flowing to South Korea, there will be more demand for Manitoba weanlings from American feeders. If American pork is flowing to South Korea, maybe less American pork will come into Canada and leave that market for domestic suppliers.
Canada needs to get its own deal with South Korea, Kynoch said, because direct sales to Korea would be the best way to take advantage of that rich and well-paying market, but overall getting the U.S./South Korea deal approved would be a plus for prairie producers.
