10.12.11

Cantwell: Eastern Washington Agriculture Jobs to Benefit from New Trade Agreements

Senate passes Cantwell-backed landmark deal to open markets for Washington exports Agreement will eliminate tariffs on agricultural products important to E. Washington economy, including wheat, beef, potatoes, apples, wine

WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) applauded the Senate passage of a comprehensive trade package that includes Free Trade Agreements (FTAs) with South Korea, Panama and Colombia. Cantwell has consistently championed the passage of the FTAs through her role on the Senate Finance Committee.

The package now goes to President Obama for his signature, after passing the House by three separate votes. The American Farm Bureau estimates that the increased marketing opportunities for Washington’s farmers and ranchers under these trade agreements could increase direct exports by $52.8 million per year and support hundreds of agriculture jobs.

Upon implementation of the FTA with Colombia, the ten percent tariff on wheat would be immediately eliminated, which the American Farm Bureau Federation estimates could increase Washington state wheat exports to Colombia by $5.9 million a year. Under the Free Trade Agreement with South Korea, the 40 percent tariff on beef would be eliminated over 15 years. The American Farm Bureau estimates Washington state could increase beef exports by $7 million per year. Beef production is the state’s 5th largest commodity and the market for American beef in South Korea has the potential to reach $1 billion.

 “This bill is a winner for Washington state’s agricultural and trade economy,” Cantwell said. “The Senate passage of these trade agreements has been years in the making. These trade agreements will open up markets to Washington state goods and make sure our products stay competitive in a global economy. They will support jobs in Eastern Washington and across the nation – from the wheat farm, to the trucks that carry the wheat, to the shipping jobs that send the product overseas.”

With South Korea representing Washington’s fourth largest export market, Washington state agriculture will see significant benefits under the United States-Korea FTA. Upon implementation, the FTA with South Korea would immediately eliminate an 18 percent tariff on frozen potato products and over time a 30 percent tariff on fresh potato products. The Korea FTA would immediately eliminate a 24 percent tariff on sweet cherries, which was equivalent to $7.5 million this year.

The reduction in tariffs would reduce the price of cherries by 75 to 90 cents per pound in South Korea, which the Northwest Cherry Growers anticipate could boost sales by $18 to $20 million per year over the next few years. The Korea FTA would also immediately eliminate a 15 percent tariff on wine. During fiscal year 2010, 24 percent of the wine exported from Washington went to South Korea. The Free Trade Agreement with Colombia would immediately eliminate a 15 percent tariff on apples, which the Washington Apple Commission estimates could lead to increases in shipments of 50 to 100 percent this season. This year, Washington state’s apple crop going to Colombia was valued at $4.5 million.

“The passage of the free trade agreements with Korea, Colombia and Panama will give our potato industry a level playing field to compete globally by reducing tariffs on frozen, fresh and dehydrated potatoes produced in our state,” said Matt Harris, Director of Governmental Affairs at the Washington State Potato Commission. “In the state of Washington, the potato industry supports 23,500 jobs and generates $4.6 billion dollars annually in economic activity. We appreciate Senator Maria Cantwell’s hard work over the years to pass these trade deals and expand market opportunity for Washington state potato growers and processors.”

During the first two months following the implementation of the European Union-Korea Free Trade Agreement on July 1, 2011, the European Union’s exports to South Korea have grown by nearly 28 percent compared to the same period in 2010. Finalization of the United States-South Korea FTA today will help secure America’s place in an important export market.

"Due to the high tariffs charged on U.S. imports, our agricultural products have been at a competitive disadvantage for far too long,” said Steve Appel, Washington Farm Bureau President and third-generation wheat farmer from Dusty, Washington. “With an estimated one in three jobs in our state dependent on international trade, passage of these agreements is a critical step in the right direction.”

The House also passed today a renewal of a job training program for trade-affected workers, sending it to the President for his signature. The Senate passed the Trade Adjustment Assistance (TAA) program extension on September 22, 2011, which partially expired in February 2011 and would have completely expired in February 2012. Cantwell joined 41 of her colleagues in May in sending a letter to the President expressing the need for Trade Adjustment Assistance program to move with the three Free Trade Agreements.

Passage of the TAA program extension through 2013 was a key component in securing approval of the three Free Trade Agreements tonight. The extension includes important bipartisan reforms made to TAA in May 2009, as well as retroactively extends coverage to TAA petitions filed after February 12, 2011, when the program’s reforms expired. Cantwell has consistently advocated including TAA as part of a broader trade and competitiveness strategy.

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