Ag Policy Blog

Concerns About White House Trade Rhetoric Regarding South Korea

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The American Soybean Association issued a strongly worded statement Sunday following reports that President Donald Trump is considering withdrawing the U.S. from its trade agreement with South Korea.

The trade rhetoric is heating up even as the U.S. and other countries try to deal with the nuclear aggression being displayed by North Korea.

Associated Press reported, "The White House alerted lawmakers that a notification of intent to withdraw could come as soon as Tuesday, the U.S Chamber of Commerce wrote in an "all hands on deck" note calling on members to lobby the administration to stay in the deal."

U.S. Senator Ben Sasse, R-Neb., issued a statement regarding news that the administration may exit the trade deal.

"The President and Nebraska have a basic disagreement about trade. His Administration holds 18th-century views of trade as a zero-sum game. I side with our farmers and ranchers who are feeding the world now."

The White House made similar overtures last spring with the North American Free Trade Agreement before agreeing to negotiate with Canada and Mexico.

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On Sunday, President Trump also tweeted about withdrawing trade with any other country that trades with North Korea. That would include China, which USDA stated just this past week would reclaim the top spot in fiscal-year 2017 for U.S. agricultural exports at $22.3 billion.

In 2016, the U.S. had a $28 billion overall trade deficit with South Korea. Seven other countries have larger trade surpluses with the U.S.

Tariffs on U.S. exports would increase to significantly higher rates than tariffs on South Korean products going to the U.S if the president withdrew from the trade deal. The trade deal lowered South Korean tariffs but the Trump administration maintains South Korea continues to be protectionist toward U.S. products.

South Korea is the sixth-largest market for U.S. agricultural products, totaling $7.2 billion in fiscal-year 2017, led by beef, corn, fruit, prepared foods and pork products, as well as soybeans.

South Korea is on pace to be the third-largest buyer of U.S. corn for the 2016-17 marketing year with nearly 5.6 million metric tons purchased -- up 202% from the previous marketing year.

The American Soybean Association on Sunday issued a statement -- calling it "a stern warning: against withdraw from the trade deal that the president's "larger strategy of brinkmanship with regard to trade agreements" that "could have disastrous consequences for the nation's soybean farmers."

ASA President Ron Moore issued a statement to President Trump.

"Trade helps our country, Mr. President, and withdrawal from KORUS would hurt us all. 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. 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," Moore said.

Moore notes the U.S. exports tariff-free nearly half the 1.3 million tons of soybeans that South Korea imports. "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."

Moore demanded the U.S. maintain KORUS, the nickname used for the South Korea-U.S. trade deal.

On Sunday, President Trump also tweeted about withdrawing trade with any other country that trades with North Korea. That would include China, which USDA stated just this past week would reclaim the top spot in fiscal-year 2017 for U.S. agricultural exports at $22.3 billion.

Top U.S. export countries, 2017 https://www.fas.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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MPETERSON1261855553
9/5/2017 | 6:23 PM CDT
Last president pushed TPP witch was dumped let's hope he doesn't mess with NAFTA. Now china and S Korea . REPUBLICANS in congress need to step up for free trade
CMOORE1893056933
9/5/2017 | 5:14 PM CDT
For the last few years we have had nothing but uncertainty and lower prices so maybe Clark can explain how who we voted for previously caused that to happen.
Clark Reimer
9/5/2017 | 7:13 AM CDT
No farmer that voted for Trump should be complaining you are getting exactly what YOU voted for more uncertainty and lower prices with less of a safety net.