INTERNATIONAL TRADE

ASA Position

ASA supports swift Congressional approval of the three pending free trade agreements (FTAs) with Colombia, Panama, and South Korea. ASA supports reauthorization of Trade Promotion Authority (TPA) in order for the President to negotiate new trade agreements with expedited procedures.

ASA opposes currency legislation or any action by Congress to unilaterally regulate the value of foreign currencies. ASA opposes legislation to take unilateral action on China’s currency that would invite retaliatory actions by China.

Background

ASA supports negotiation of trade agreements that significantly improve access to foreign markets for U.S, soy and livestock products. We oppose legislation or other measures that are protectionist and which encourage our trading partners to take similar actions.

Korea FTA: The trade agreement offers immediate duty-free access to U.S. soybeans for crushing and to U.S. soybean meal. For the first time, producers of U.S. food-grade soybeans would have access to the South Korean market outside of the import monopoly created by the Korean State Trading Enterprise. Tariffs on refined soybean oil would be eliminated over 5 years, and tariffs on crude soybean oil would be eliminated over 10 years. In 2010, Korea imported $440 million worth of soybeans, soybean meal and soybean oil from the U.S.

Colombia FTA: Colombia will immediately eliminate tariffs on U.S. exports of soybeans, soybean meal, high quality beef, certain pork products, most kinds of poultry, and some dairy products. Colombia will also eliminate its price band system for U.S. imports. In 2010, U.S. exports of soybean products to Colombia were valued at $103 million, down 64 percent from 2008 when exports reached $287 million.

Panama FTA: Tariffs in Panama on U.S. soybeans, soybean meal, and crude vegetable oils will be removed immediately upon the entry into force of the FTA. Tariffs will also be removed immediately for high quality beef, certain chicken products, frozen whole turkeys and turkey breast, and pork variety meats. In 2010, U.S. exports of soybean products to Panama were $65 million.

Currency Legislation: During the last Congress, the House passed the Currency Reform for Fair Trade Act targeted at China. This year, this legislation has been re-introduced in both the House (H.R. 639, 162 sponsors) and the Senate (S.328, 13 sponsors). A bipartisan group of Senators is planning to introduce another currency bill to provide for stronger action by the Treasury and Commerce Departments to counteract the trade impact of China’s currency policies. ASA is concerned that such measures would be counterproductive and would lead to retaliatory actions by China, the largest U.S. soybean market valued at $11.2 billion. Instead, ASA calls for the U.S. to develop a bilateral and multilateral approach in order to achieve tangible results on China’s exchange rate.