Iowans stress importance of ratifying U.S.-South Korea trade pact

DES MOINES – Billions of dollars in trade and thousands of potential jobs are riding on a U.S.-South Korea Free Trade Agreement that must be passed by Congress this year to keep American products competitive in the world's 12th largest economy, participants in an Iowa trade mission said Wednesday.

“The clock is ticking,” said Iowa Agriculture Secretary Bill Northey in discussing a trade pact first signed in 2007 but still not ratified during a teleconference with Iowa reporters from Seoul, South Korea. “They've had a lot of patience. But it's time to get it moving. There's a lot at stake.”

Northey and Lt. Gov. Kim Reynolds said the trade agreement was the foremost topic during two days of meetings that a 41-member Iowa trade delegation had with South Korean officials, business groups and agricultural leaders. The Iowa contingent is slated to arrive in China on Thursday to promote the state's products and discuss potential economic ties of mutual benefit.

During their two days in South Korea, Iowa leaders met with business prospects and delivered a letter to Kathleen Stephens, U.S. ambassador to South Korea, signed by Gov. Terry Branstad and 24 other governors urging swift action by the Obama administration to forward the renegotiated trade agreement to Congress for ratification yet this calendar year. They also invited Stephens, a biking enthusiast, to participate in Iowa's week-long bike ride across the state in 2012.

“It needs to happen this year,” said Debi Durham, director of the Iowa Department of Economic Development, who noted that the pact potentially could generate more than 10,000 jobs in Iowa once fully implemented with an Asian nation that currently is the fifth largest importer of Iowa ag products. Iowa exports pork, turbines, aircraft engines and parts, avionics and communications gear, and machinery for filling and closing bottles to South Korea.

Durham and Northey warned Iowa and other U.S. states would be put at a competitive disadvantage without the agreement because other trade pacts – such as one with the European Union that takes effect next month – will reduce import tariffs that currently total 20 percent for U.S. pork and 40 percent for U.S. beef shipped to the South Korean market.

“It's potentially worth billions of dollars in ag trade,” Northey said. “If for some reason we fail to go ahead and pass this free trade agreement, I think it would be harmful to the relationship. It would also be concerning to some of our other trade partners that we have now decided not to trade. So I think there's a lot hanging in the balance.”

The Iowa ag secretary said Korean officials are interested in ramping up their pork exports following an outbreak of foot and mouth disease that destroyed about one third of the country's hog inventory. He said it likely will take several years for them to rebuild their hog numbers, but he said food safety and quality are paramount if Iowa hopes to take advantage of the current opportunities in that burgeoning market.

Reynolds said she had dinner with the leader of PMX, a company with Iowa ties in Cedar Rapids, and hosted receptions for potential and existing customers of Iowa products and business ties to highlight opportunities, while Durham said DED leaders have been with business prospects – including one South Korean firm that has Iowa as a finalist for a possible venture.

“I think that certainly the effort we made to call on them at their corporate headquarters went over so well – very well received,” she said.

“It's an intense agenda, and I can tell you that we're all operating on very little sleep for the last two days but it's certainly worthwhile coming and doing these trade missions,” added Durham, who is participating in her first Iowa overseas trip. “Certainly elevating international trade and investment is absolutely the right strategy for Iowa and the nation and is an essential component for creating and sustaining jobs.”

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