Farm organizations are protesting yet another presidential threat to withdraw from a trade agreement that would threaten the livelihoods of many of those growers who supported him in 2016.
The White House announced on Friday (Sept. 1) that President Trump had instructed his advisers to prepare to withdraw from the South Korea-U.S. (KORUS) free trade agreement, possibly as early as this week.
The move reportedly has drawn opposition from members of the president’s national security team who are concerned it would increase tensions with an important ally (South Korea) during the middle of the crisis involving North Korea’s nuclear weapons and long-range missile programs.
But the farm groups are more upset than the president’s nation security advisors, judging from the statements they issued over the Labor Day Weekend. Typical was this from the American Soybean Association, which said such a move could have “disastrous consequences” for the nation’s soybean farmers.
“Trade helps our country, Mr. President, and withdrawal from KORUS would hurt us all,” said ASA President Ron Moore. “As soybean farmers, we benefit greatly from exports, which contribute a $2 billion annual surplus to our nation’s balance of trade. Trade makes our local businesses and our communities stronger.
Trade agreements’ value
“Yet whether it’s South Korea, Mexico and Canada, or our neighbors on the Pacific Rim, we once again find ourselves fighting to communicate the value of trade to farmers.,” he said in the statement.
With respect to South Korea, U.S. farmers supply nearly half of the 1.3 million tons of soybeans that country imports, with no tariffs as a result of the KORUS agreement. Most of Korea’s soybean imports, however, come from U.S. competitors in Brazil and Argentina.
“If we withdraw, reinstatement of tariffs will make it hard to maintain our market share and will further increase our competitors’ advantage,” said Moore. “And it would be devastating for our U.S. livestock customers who export meat products to South Korea.
“The idea that we’re the only game in town when it comes to selling soybeans or other agricultural products abroad is false. So is the notion that there’s always another country that will buy our commodities. Furthermore, even the threat to withdraw from this or any trade agreement is a dangerous course of action. Repeatedly walking our trade relationships to the brink, or actually breaking them, only weakens our standing abroad.”
Moore said ASA members “demand that the U.S. remain in KORUS, and that we move forward to negotiate new trade agreements rather than retreating from existing ones. We must expand rather than abandon access to essential overseas markets for the products we produce.”
Wheat grower organizations
Both the National Association of Wheat Growers and the U.S. Wheat Associates strongly urged the Trump Administration not to withdraw from the U.S.-Korea Free Trade Agreement.
“We believe it would be irresponsible to unilaterally walk away from this or any other trade agreement,” said Mike Miller, USW chairman. “Withdrawing raises the specter of retaliation against agricultural exports and creates unnecessary uncertainty in the market.
“Any disruption in the relationship wheat growers have built in Korea over more than 60 years gives Australia, Canada and even Russia an opening to move in and take business away from us at a time when we are all struggling to stay profitable. KORUS, like the North American Free Trade Agreement, has been very good for American agriculture.”
David Schemm, NAWG president and a wheat grower from Sharon Springs, Kan., said the KORUS agreement “reinforces the administration’s stated goal to sell more agricultural products overseas.
“We support finding ways to improve any agreement, but let’s do that in a reasoned and respectful way, with input from all stakeholders so U.S. wheat farmers can gain greater access to world markets.”
Third largest wheat market
South Korea was the third largest volume importer of U.S. wheat in marketing year 2016/17 (June to May), the two organizations noted.
According to press reports, President Trump has expressed frustration at his inability to keep campaign promises to end trade deals he argues have disadvantaged U.S. workers. He began the steps to withdraw from the North American Free Trade Agreement last spring but finally gave in to opposing arguments by Agriculture Secretary Sonny Perdue and farm organizations.
More recently, he has said he might still withdraw from NAFTA, indicating he believes Mexico was not offering enough concessions in the re-negotiation session that occurred between the U.S., Canada and Mexico in Washington last month.
Trump has said countries that enjoy a trade surplus with the United States are “fleecing” U.S. workers and consumers.
The U.S.-South Korea free-trade agreement allows the United States to terminate it after six months if it wishes to. So if Trump signed a letter to withdraw from the agreement, the deal would effectively be terminated in March 2018. KORUS was approved by Congress.
For more on KORUS, click on https://ustr.gov/trade-agreements/free-trade-agreements/korus-fta.