FTAs pending for U.S. beef
Washington, D.C. – Right now there’s much competition with the U.S. for beef imports in the Asian markets from Australia and the European Union (EU), and Senator Enzi’s Legislative Assistant Travis Jordan says that’s accompanied by great potential for market access.
“The EU just finished up an agreement with Korea that will be finalized over the next year, and the U.S. is in that process, and there’s potential for Europe to get ahead of us,” says Jordan.
“One thing we’ve learned from market access for products, especially beef, is that as soon as there is some market access it’s a lot tougher to push somebody else out of the market. We want to get there first, and be there with a strong presence, otherwise it will be tough to regain market share,” he explains.
Jordan notes that the new Congress presents a better opportunity for increasing beef exports overseas. “Perhaps they will be more accommodating in expanding free trade,” he says, adding there are also some changes in the Senate Finance Committee, with members who have historically been supportive of sending beef overseas.
The rising incomes of citizens in southeast Asia, Vietnam and even China have created an accompanying rise in demand for protein, including U.S. beef.
“There’s a lot of potential for market access,” says Jordan. “They don’t have the beef production to support their population’s growing taste, and it’s a question of whether the U.S. or another market gets in those places.”
Jordan says the biggest free trade agreement that’s currently pending is the Korean Free Trade Agreement (FTA).
“That’s the biggest one of concern, and it will most likely move in the next few months,” he says. “The last few months we’ve been hearing some news on it, and in early December the President announced it had some momentum.”
The Korean FTA has two outstanding issues – automobile access and beef trade.
“They’re strict on what they allow U.S. auto makers to take into Korea, mostly because of the tariffs. The Korean market in the U.S. is strong, because we don’t have the same tariffs. That issue was resolved a week-and-a-half ago, saying the Koreans will allow additional market access,” comments Jordan.
However he says there was no announcement on beef at that time. “The only announcement by trade representatives was that there will be something on beef in the future, and it will move,” he says.
Even though the beef announcement has been absent to date, Jordan says he sees the momentum on the Korean FTA continuing.
“U.S. beef is a very sensitive issue in Korea. The last time there was additional market share, there were protests in the streets,” he reminds. “We need to recognize that, and that’s why it hasn’t moved in the last couple of months.”
Jordan says the Korean FTA is the most likely FTA to be considered by Congress next year. “A lot of the labor and environmental issues the Democrats have pursued have been agreed to by Korea, as well as the auto issue,” he says.
In addition to the major agreement with Korea, Jordan says Columbia and Panama also have pending FTAs.
“The Columbian imports are an advantage because they’ll be for prime cuts of beef. Panama doesn’t have as much significance in terms of economics, but it helps to lower some of the tariffs on U.S. products,” he explains.
In regard to other Asian markets, Jordan says the U.S./Taiwan Beef Protocal was signed in 2009, shortly before the Taiwanese congressional elections.
“They backed away from the agreement they signed with the U.S., and since that time our exporters and the industry have worked to get as much of that agreement back as we can,” says Jordan.
“That’s a setback we communicated as Congress to the Taiwanese government, and they seem committed to at least pursuing additional market share in the future,” he says. “We’ve made it clear that if they want to pursue trade frameworks they’ll have to take beef as well.”
China has always been a tough market, without much access for U.S. products in general. Jordan says in late December the U.S. and China will talk once again at the Joint Commission on Commerce and Trade that’s been an annual event since the 1980s. Jordan says a priority this year will be market access for U.S. beef.
Jordan names Vietnam as another Asian market that’s experiencing significant growth and higher incomes, which has led to a higher demand for beef products.
“Beef cows don’t do very well in southeast Asia. It’s a little too hot and the vegetation isn’t right. Talks to include Vietnam in the Transpacific Partnership would help us pursue some additional FTAs with that country, and beef would be a part, as well as some dairy, and even hay,” says Jordan. “Vietnam imports a lot of hay for their dairy industry, because they can’t grow hay, so quite a few exporters in California ship their hay across the ocean to Vietnam.”
Jordan concludes that Korea is the key to opening many of the other markets across the Pacific Ocean, including Japan and China.