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Vilsack calls for deal’s early ratification to increase agricultural exports

Yonhap News, Korea

Vilsack calls for deal’s early ratification to increase agricultural exports

By Hwang Doo-hyong

8 March 2011

WASHINGTON, March 8 (Yonhap) — U.S. Agriculture Secretary Tom Vilsack Tuesday called for early ratification of the pending free trade deal with South Korea, expressing hope that the deal will greatly increase shipments of U.S. agricultural products to South Korea.

"We believe a ratified U.S.-Korea Free Trade Agreement will expand agricultural exports by what we believe to be $1.8 billion," Vilsack told reporters on a conference call. "With ratification of the U.S.-Korean Free Trade Agreement, Korea’s 40 percent tariff on U.S. beef will be eliminated over the next 15 years."

The agriculture secretary also said the deal’s implementation will help boost exports of U.S. beef to South Korea, the seventh biggest trading partner for the U.S.

"A ratified U.S.-Korean Free Trade Agreement will reduce the tariffs on our beef exports to zero over time, enabling American beef producers to build on the exponential growth of exports to Korea, which reached $518 million in 2010, a one-year increase of 140 percent in value," he said.

South Korea bans shipments of beef from cattle over 30 months old due to fears of mad cow disease, which prompted weeks of street rallies against U.S. beef in Seoul in 2008.

But Sen. Max Baucus (D-Montana) has threatened not to move the Korea FTA forward unless Seoul allows shipments of beef from cattle of all ages. Montana is said to be the biggest source of beef from older cattle.

Baucus, chairman of the Senate Finance Committee, will preside over a committee hearing Wednesday on the free trade deals with South Korea, Panama and Colombia.

Beef was not discussed in December when officials from Seoul and Washington produced a supplemental agreement to address U.S. concerns over the lopsided auto trade, the biggest hurdle to getting congressional approval of the Korea FTA since it was signed in 2007 under the Bush administration.

The revised deal calls for a delayed phase out of auto tariffs, among other things, in return for Washington’s concessions on pork and medicine.

Baucus has said he is "deeply disappointed" by the revised deal, saying it "fails to address Korea’s significant barriers to American beef exports."

U.S. Trade Representative Ron Kirk has said the deal is not just about beef but about automobiles and all other products, although he said he will continue to push for wider access to the South Korean beef market.

The U.S. beef industry supports the deal, hoping it will help boost shipments of U.S. beef to South Korea, which emerged as the fourth biggest importer of U.S. beef products in 2009, at US$216 million.

U.S. beef exports to South Korea nearly doubled to 101,816 tons last year, up 94 percent from a year earlier, according to figures from the U.S. Meat Export Federation.

South Korea was the second biggest U.S. beef market, worth $815 million, when Seoul banned imports due to fears over bovine spongiform encephalopathy, or mad cow disease, after a few U.S. cases surfaced in 2003.

Some Republican lawmakers want to consider the Korea FTA concurrently with similar deals with Colombia and Panama.

Kirk has dismissed that as "a huge mistake."

The United States Trade Representative (USTR) is still negotiating with Panama and Colombia over labor rights, alleged abuse of union leaders and some other issues so that they do not hinder the deals’ passage through Congress.

Vilsack echoed Kirk’s theme.

"We’re working to resolve the outstanding issues with reference to the Colombian and Panama agreement," he said. "But right now we have before us the U.S.-Korean Trade Agreement that has historic bipartisan support from Democrats and Republicans, as well as from business and labor, from the Chamber of Commerce to the UAW, and it’s time to move forward."

The Obama administration will likely bring the Korea FTA to Congress first, with a timeline for the submission of the two other deals later, experts say.

Kirk on Monday sent letters to the congressional leadership, urging them to begin discussions for the ratification of the Korea FTA "without delay" as a prelude to presenting it to Congress.

Kirk said on Feb. 9 that the Obama administration will present the deal to Congress within a month with the hope that Congress approves it "this spring" so as not to lag behind the European Union, which ratified a similar deal with Seoul set to take effect in July.

"If we don’t act quickly and decisively, it’s possible that America’s competitors will secure their own trade deals with Korea and that our competitors’ products will achieve the advantage in the Korean market," Vilsack said.

The South Korean National Assembly is waiting for the U.S. Congress to approve the Korea FTA first to facilitate its ratification in South Korea, where the liberal major opposition party is set to oppose the deal.

The Korea FTA was negotiated under the Trade Promotion Authority Act of 2002, which requires Congress to vote yes or no without any amendments within 90 days of the deal’s submission.

Obama expects the Korea FTA to further his ambitious goal of doubling exports within five years as a means of creating jobs as the world’s biggest economy struggles to escape the recession that began in late 2008, the worst in decades.

In his State of the Union address last month, Obama called on Congress to ratify the Korea FTA "as soon as possible," saying it will "support at least 70,000 American jobs."

The U.S. International Trade Commission says the deal would increase annual two-way trade by more than $20 billion.

The U.S. goods trade deficit with South Korea was $10.6 billion in 2009, down $2.8 billion from 2008.