President Donald Trump recently threatened to withdraw from the Korea-U.S. Free Trade Agreement (KORUS).
The administration is arguing the U.S. did not get a good deal in its agreement with South Korea. According to the U.S. Trade Representative (USTR)’s website, the trade deficit with South Korea was nearly $28 billion in 2016 in goods alone. Some farm groups say for agriculture, the deal is a win.
Darci Vetter, former chief agricultural negotiator for the USTR under the Obama administration, says before the agreement, Korea’s average agriculture tariffs were in the double digits. Some up to 50 to 60 percent.
“We’d be paying a much higher tariff, or there would be a much bigger difference in the prices that we’d have to pay,” she said.
Vetter is calling the deal incredibly valuable for U.S. agriculture.
“Already, we’re seeing big results—beef exports have grown 60 percent to korea between 2011 and 2016, exports of cheese are up 250 percent, cherries are up 185 percent,” she said.
Wheat growers are in favor of the deal, as South Korea was the third-largest importer of U.S. wheat in the 2016-2017 marketing year.
According to the U.S. Wheat Associates, any disruption in the relationships 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.”
Economists at Iowa State University are estimating pork prices could fall by nearly $5 per animal if the U.S. terminates the deal.
Tom Sleight, president and CEO of the U.S. Grains Council (USGC), says South Korea is the third-largest importer of U.S. corn so far this marketing year. The country is also the third-largest importer of U.S. dried distiller’s grains (DDGs).
“Korea has been a long-standing loyal marketplace for the U.S.,” said Sleight. “Korea is a good customer. We don’t need that tension to come into the marketplace.”
There seems to be some pushback within the administration on whether renegotiation the deal should be a high priority.