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Trade Agreements Bring Good Economic News
This week brought one of the most positive headlines about the economy in a long time: “U.S. farmers celebrate approval of free trade deals.”
Congress approved the pending trade agreements with Korea, Colombia and Panama, giving optimism to farmers, manufacturers and service providers eager to have greater access to these markets.
Iowa is fortunate to have fertile soil, land mass, and sophisticated science that raises crop yields and maintains animal health. Other countries lack the attributes necessary for agricultural production. And in some cases, U.S. trading partners even put a premium on cuts of meat or other products that are less popular in the United States than others, which gives U.S. producers lucrative markets for those items. For example, experts say beef tongue is popular in Korea but not in the United States. Every product that finds a market is to the benefit of U.S. producers and the industries that support the producers, such as transportation and agricultural equipment manufacturers.
Kemin Industries of Des Moines is an example of a local company doing business globally and looking forward to the new opportunities presented through the newly approved trade agreements. Kemin started as a family business making agricultural products for Midwestern farmers. It now operates and sells products in more than 60 countries. The company vice president said, “Simply stated, the more the agricultural and manufacturing sectors are able to export, the more money we will see in the Iowa economy.”
The National Association of Manufacturers estimates the three trade agreements will lead to the creation of 100,000 jobs. There are estimates from other sources that suggest the number of jobs created may be even higher.
The Obama administration estimates the Korea trade agreement alone will create 70,000 additional jobs for the U.S. work force.
The Korea agreement could increase the price farmers receive for their hogs by $10 per hog. It could increase Iowa soybean exports to Korea by more than $11 million per year.
The Colombian agreement will level the playing field for Iowa and other U.S. corn farmers so they can begin to reclaim some of the market share they lost due to high tariffs from that country. Iowa alone stands to increase its corn exports to Colombia by more than $11 million per year.
The agreement with Panama will bring about better opportunities for a variety of agricultural products, including beef, poultry, and pork.
The three agreements together are expected to increase Iowa exports of direct agricultural commodities alone by $162.2 million per year, adding 1,460 jobs to the Iowa economy, according to the American Farm Bureau Federation.
These are just the agricultural benefits. All sectors of the economy will benefit from greater access to the three countries. American manufacturers of medical equipment, information technology, environmental goods, and machinery, and providers of financial services, express delivery services, accounting, and much more will have new opportunities for growth.
With so many benefits at stake, it’s disappointing that the trade agreements took nearly five years to gain approval because of political delays from the Obama administration and congressional Democrats. While the United States has lagged behind in enacting new agreements, other countries have passed us by.
The value to the United States of the Korea, Colombia and Panama trade agreements should provide a wake-up call to the White House and congressional Democrats. The old saying is, you snooze, you lose. With 9 percent unemployment, the opportunities provided by these trade agreements couldn’t come soon enough. Our country can’t afford to lose any more ground on economic growth.
October 14, 2011
This week brought one of the most positive headlines about the economy in a long time: “U.S. farmers celebrate approval of free trade deals.”
Congress approved the pending trade agreements with Korea, Colombia and Panama, giving optimism to farmers, manufacturers and service providers eager to have greater access to these markets.
Iowa is fortunate to have fertile soil, land mass, and sophisticated science that raises crop yields and maintains animal health. Other countries lack the attributes necessary for agricultural production. And in some cases, U.S. trading partners even put a premium on cuts of meat or other products that are less popular in the United States than others, which gives U.S. producers lucrative markets for those items. For example, experts say beef tongue is popular in Korea but not in the United States. Every product that finds a market is to the benefit of U.S. producers and the industries that support the producers, such as transportation and agricultural equipment manufacturers.
Kemin Industries of Des Moines is an example of a local company doing business globally and looking forward to the new opportunities presented through the newly approved trade agreements. Kemin started as a family business making agricultural products for Midwestern farmers. It now operates and sells products in more than 60 countries. The company vice president said, “Simply stated, the more the agricultural and manufacturing sectors are able to export, the more money we will see in the Iowa economy.”
The National Association of Manufacturers estimates the three trade agreements will lead to the creation of 100,000 jobs. There are estimates from other sources that suggest the number of jobs created may be even higher.
The Obama administration estimates the Korea trade agreement alone will create 70,000 additional jobs for the U.S. work force.
The Korea agreement could increase the price farmers receive for their hogs by $10 per hog. It could increase Iowa soybean exports to Korea by more than $11 million per year.
The Colombian agreement will level the playing field for Iowa and other U.S. corn farmers so they can begin to reclaim some of the market share they lost due to high tariffs from that country. Iowa alone stands to increase its corn exports to Colombia by more than $11 million per year.
The agreement with Panama will bring about better opportunities for a variety of agricultural products, including beef, poultry, and pork.
The three agreements together are expected to increase Iowa exports of direct agricultural commodities alone by $162.2 million per year, adding 1,460 jobs to the Iowa economy, according to the American Farm Bureau Federation.
These are just the agricultural benefits. All sectors of the economy will benefit from greater access to the three countries. American manufacturers of medical equipment, information technology, environmental goods, and machinery, and providers of financial services, express delivery services, accounting, and much more will have new opportunities for growth.
With so many benefits at stake, it’s disappointing that the trade agreements took nearly five years to gain approval because of political delays from the Obama administration and congressional Democrats. While the United States has lagged behind in enacting new agreements, other countries have passed us by.
The value to the United States of the Korea, Colombia and Panama trade agreements should provide a wake-up call to the White House and congressional Democrats. The old saying is, you snooze, you lose. With 9 percent unemployment, the opportunities provided by these trade agreements couldn’t come soon enough. Our country can’t afford to lose any more ground on economic growth.
October 14, 2011