RALEIGH -- Agriculture is essential to the prosperity of North Carolina, particularly its rural communities. Exports make up about one-third of North Carolina's $9.6 billion in farm cash receipts. International trade is crucial to the state's 52,000 farmers.
Unfortunately, the nation's ability to trade openly in the world marketplace is in jeopardy. Around the world, there are more than 600 bilateral and regional trade agreements in place or under negotiation. Sadly, the United States has a share in fewer than 25 of these trade deals, according to economics researchers with American Farm Bureau.
Of particular concern are free trade agreements (FTAs) with Korea, Colombia and Panama that have been stalled in Congress for several years. Now, as the administration and Congress continue to debate their passage, we are losing nearly $3 billion per year in agriculture exports.
These FTAs would increase export opportunities for a range of North Carolina agricultural products, including poultry, pork, soybeans and cotton. Why is this important for the average North Carolinian?
North Carolina ranked 13 among all 50 states in 2008, with agricultural shipments estimated at $3.1 billion. Agricultural exports help boost farm prices and income, while supporting more than 35,000 jobs both on-the-farm and off-the-farm in food processing, storage and transportation.
North Carolina's top agricultural exports in 2008 were: tobacco leaf ($574 million); live animals and red meats ($554 million); poultry and products ($481 million); and soybeans and products ($360 million).
Agricultural trade is not only critical to North Carolina's farmers, it is vital to the U.S. economy and the creation of American jobs. Every $1 billion in agricultural exports supports 9,000 U.S. jobs, such as transportation workers, food processors, packers and even sales and marketing professionals.
Ratifying these trade agreements also means leveling the playing field. Currently, U.S. products going into these countries face exorbitant tariffs that penalize U.S. producers. Yet, while we pay tariffs of up to 160 percent to sell to the Colombian and Panamanian markets, they receive duty-free access to the U.S. market for their goods. In South Korea, tariffs of up to 500 percent are placed on U.S. goods. Passing these trade agreements would immediately eliminate most of these tariffs.
Our competition takes advantage of our inaction with each day that goes by without passage of these FTAs. The European Union is moving forward with its own South Korean agreement, hoping it can beat us to the punch. Australia, Chile and Canada are also moving in and taking potential U.S. market share in the three countries.
Our market share in Colombia, for example, has plummeted from 46 percent to 21 percent in the past several years. In South Korea, the market share for Chilean wine has increased from 2.4 percent to 21.5 percent, while ours has decreased from 17.1 percent to 10.8 percent. Panama has already completed an agreement with Canada, which includes beef, potato products and processed foods, while we are left out in the cold.
Farm Bureau urges Congress to pass the Korea, Colombia and Panama trade agreements quickly. Without action, our role as a major trading partner diminishes and U.S. farmers lose market opportunities.
