Pork producers’ long-awaited final approval of the South Korea free-trade agreement may have hit another snag. Sen. Max Baucus (D-Mont.), U.S. Senate Finance Committee Chairman, is siding with cattle ranchers from his home state in opposition to the South Korean Free Trade agreement, according to the Washington Post. Baucus could hinder President Obama's efforts to win quick approval of the pact.
Baucus, whose committee oversees trade issues, has pledged opposition until South Korea reconsiders restrictions on many U.S. beef exports. It is unclear if he will merely vote against the agreement or if he will use his post as finance chairman to block the free-trade agreement indefinitely, according to the report. Baucus is working with trade officials to adopt a deal that helps ranchers get a better deal.
The trade deal represents a potentially significant increase in revenue to the U.S. pork industry. According to Iowa State University economist Dermot Hayes, by the end of the agreements 10-year phase-in period, total U.S. pork exports to South Korea will be almost 600,000 metric tons. That represents nearly twice the current U.S. export level to Japan - now the top value market for the U.S pork industry.
The FTA will lift live hog prices by $10 per animal and will generate an additional $687 million in U.S. pork exports. South Korea alone would consume 5 percent of total U.S. pork production, and the agreement would create more than 9,000 new direct jobs in the U.S. pork industry.
Baucus's stand is a major obstacle to the White House and Republicans who are eager to bring the long-delayed trade agreement to the Senate floor.
The beef issue, which reflects South Koreans fear that U.S. beef is unsafe, is thought by some to be more about politics than economics. The United States and South Korea overcame another dispute over automobiles to complete the trade deal late last year.
The treaty is the most significant trade pact since the North American Free Trade Agreement in 1993. The administration says it will create tens of thousands of American jobs in manufacturing, agriculture, services and other sectors by boosting U.S. exports by up to $11 billion.
Source: Washington Post, National Pork Producers Council