Cantwell Hails President Obama’s Signing of Milestone Trade Deals
Cantwell-backed deals become law, will open markets for Washington farmers by eliminating tariffs on important crops Deal will also improve trade with South Korea - the 4th biggest market for WA state exports - and supports jobs at Western Washington ports
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) hailed the President’s approval of a comprehensive trade package that includes Free Trade Agreements (FTAs) with South Korea, Panama and Colombia. The trade agreements were signed into law this morning at a White House signing ceremony. The American Farm Bureau estimates that the increased market opportunities for Washington state under these trade agreements could increase direct exports by $52.8 million per year and add hundreds of jobs to the state economy.
Cantwell consistently championed the passage of the FTAs through her role on the Senate Finance Committee. She helped secure passage in the Senate after the deals passed the House on three separate votes. According to the International Trade Commission, these agreements will create 250,000 U.S. jobs and increase U.S. exports by $13 billion.
The governments of South Korea, Panama and Colombia must now fully implement the agreements before the full benefits of the agreements can be achieved.
“Today is a huge victory for Washington state’s agricultural and trade economy,” said Cantwell. “President Obama’s signature on these trade agreements has been years in the making. These trade agreements will open up markets to Washington state goods and make sure they stay competitive in a global economy. More importantly, this marks a new opportunity for Washington’s family farms and our ports to drive exports in important foreign markets. The agreements will support jobs in Washington and across the nation – from the apple orchard, to the trucks that carry the apples to the port, to the shipping jobs that send the products overseas.”
The three trade agreements the President signed today eliminate tariffs on various agricultural products important to Washington’s economy, including potatoes, wine, beef, wheat, apples, cherries, and pears. Under the agreement, South Korea would eliminate a 40 percent tariff on beef over 15 years. The American Farm Bureau estimates Washington state is expected to 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.
“We are excited about the passage of the KORUS- FTA and the immediate benefits it will bring to Washington state’s economy through its major production industries,” said Yun S. Hong, Chairman of the Korean American Chamber of Commerce in Washington State. “Trade and investment between Washington state and Korea’s $1 trillion dollar economy will enable local businesses across all sectors to grow, create jobs, and boost our state’s economy. We’re grateful to all who’ve worked diligently for the passage of this KORUS- FTA, particularly to our state senators and representatives, and are eager to strengthen our economic and cultural partnerships with South Korea.”
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 also 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 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.”
Washington state is one of the nation’s top growers and exporters of fruit, with production of Washington apples alone worth $1.4 billion in 2009. The Colombia FTA will immediately eliminate a 15 percent tariff on apples and according to the Washington Apple Commission, increase shipments to Colombia by 50 to 100 percent this season. This year, Washington state’s apple crop going to Colombia was valued at $4.5 million.
Colombia’s 15 percent tariff on pears will also be immediately eliminated under the agreement; in 2010 Washington state exported $2.54 million worth of pears to Colombia. Also under the Colombia FTA, the 10 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. The fourth largest producer of wheat in the nation, Washington state exports 85 percent of its wheat crop each year. Colombia is dependent on imports to satisfy 97 percent of its wheat demand.
“The Northwest Horticultural Council enthusiastically supports the efforts by Congress, Senator Maria Cantwell and President Obama to pass the trade agreements with Korea, Colombia and Panama,” said Mark Powers of the Northwest Horticultural Council. “Collectively these trade agreements will benefit apple, pear and cherry growers and bring millions of dollars from overseas into the Washington state economy.”
Washington’s ports and waterways – the closest to Asia and Alaska of all U.S. ports – also stand to significantly benefit from the U.S.-Korea FTA. Washington state is the 3rd largest exporting state in the country and together, the Ports of Seattle and Tacoma comprise the second largest container load center in the country. Last year, $704 million in state revenue was generated from port activities and 8,480 companies exported their goods from operations in Washington.
"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.”
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. The enactment today of the United States-South Korea FTA today will help secure America’s place in an important export market.
The President also signed into law a renewal of a job training program for trade-affected workers. 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 the 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. 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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