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Withdrawal from Korea FTA postponed

Getty Images South Korean flag
Legislative Watch: Withdrawal from KORUS on hold for now; Trump and Democratic leadership deal to avert government shutdown; more USDA nominations announced.

President Trump’s proposal to have the United States withdraw from the South Korea-U.S. Free Trade Agreement is on hold for now. The White House announced last Friday that Trump had instructed White House staff to prepare a letter to withdraw from KORUS. The president has complained that since KORUS went into effect in 2012, the U.S. trade deficit has increased. The possibility of withdrawing from KORUS is a major concern to agriculture and business, but also with national security experts during a time of increasing tensions over the crisis with North Korea’s nuclear weapons. 

South Korea is the sixth largest export market for U.S. agriculture. It is a significant market for U.S. beef, pork, corn, soybeans and wheat. U.S. agricultural exports to South Korea have grown from $2.9 billion in 2006 to $6.2 billion in 2016. U.S. beef exports to South Korea were $1.1 billion last year compared to $582 million in 2012 making it the second largest market for U.S. beef exports. Pork exports were $365 million in 2016 and making South Korea the fifth largest export market. The first six months of this year have seen U.S. pork exports increase by 31% in volume and 38% in value to South Korea.

Withdrawing from KORUS met strong opposition from agriculture, business and Congressional leaders. 

The North American Meat Institute sent a letter to Congress urging Members to contact the administration and asking that the United States not withdraw from KORUS. NAMI says, “If we walk away from KORUS, our nation’s producers and processors will be directly and immediately harmed. We urge you to contact President Trump, Secretary Perdue and Ambassador Lighthizer, asking them to refrain from threats to withdraw from KORUS. As with the NAFTA agreement, agriculture has benefitted greatly and we must pursue a ‘do-no-harm’ approach to any trade discussions.”

The American Soybean Association reminds President Trump that if the United States withdraws from KORUS, tariffs will be reinstated and the United States is not the only supplier in the world. The ASA says, “With respect to South Korea, we 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 our 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. 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.”

Getty Images/Win McNamee

Trump and Democrats reach a deal on key fiscal issues to avoid shutdown
President Trump and the Democratic leadership in Congress reached an agreement to avoid a government shutdown at the end of the month, raise the debt ceiling and provide $15.3 billion in disaster assistance for areas hit by Hurricane Harvey. The package funds the federal government and raises the debt ceiling until Dec. 8. The agreement passed the Senate and the House will approve the measure today or Saturday.


More USDA nominations announced
President Trump has announced three nominations for key positions at USDA. Bill Northey will be the undersecretary for Farm Production and Conservation and will oversee the Farm Service Agency, Natural Resources Conservation Service and the Risk Management Agency. Northey is currently serving his third term as Iowa secretary of agriculture and is a former president of the National Corn Growers Association.

Greg Ibach is being nominated to be the undersecretary for Marketing and Regulatory Programs. Ibach will oversee the Animal Plant Health Inspection Service, Agricultural Marketing Service and Grain Inspection, Packers and Stockyards Administration. He is currently the Nebraska director of agriculture.

Stephen Vaden will be USDA’s general counsel, and is currently serving in that position.

Earlier, Trump announced the nominations of Steve Censky as deputy secretary, Ted McKinney as undersecretary for Trade and Foreign Affairs, and Sam Clovis as undersecretary for Research, Education and Economics.

The Senate Agriculture Committee is expected to hold a confirmation hearing on the nominees on Sept. 19.

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