Charlotte Observer, NC
07-22-07
Trade boosts N.C. hog profits
When Congress approves free trade deals, N.C. pork industry will profit
From R.C. Hunt, a pork producer from Wilson who is president of the North
Carolina Pork Council:
When it comes to U.S trade policy, in recent years it has seemed more difficult to
gain bipartisan agreement among American policymakers than to negotiate with
foreign governments.
That was certainly the case earlier this year as four Free Trade Agreements
negotiated by the Bush administration -- with Colombia, Panama, Peru and
South Korea -- sat stalled in Congress over concerns about the lack of adequate
labor and environmental standards in the pacts.
After weeks of negotiations between congressional leaders and the
administration's trade policy team, the stalemate was recently broken when
House Speaker Nancy Pelosi and U.S Trade Representative Susan Schwab
announced an agreement on new labor and environment provisions for these
and future FTAs.
With this crucial bipartisan breakthrough at the leadership level, the focus now
shifts to the rest of the Congress. North Carolina pork producers fervently hope
both political parties will unite behind their leaders and quickly approve the
pending FTAs because these trade pacts will provide a much needed boost to
U.S. pork exports.
Just how important are pork exports to North Carolina's economy? Nearly 3,200
jobs and $118 million of personal income are generated for the state from
exports of North Carolina-grown pork, according to Iowa State University
economists Daniel Otto and John Lawrence. More pork trade, resulting from
these pending agreements, would mean more jobs and more income.
Overall, the pork industry provides tremendous benefits to North Carolina. Otto
and Lawrence estimate that the state had over $2.1 billion of gross receipts from
hog sales in 2005. This helped support about 25,000 pork-related jobs in the
state, ranging from input suppliers and producers to processors and handlers, as
well as Main Street businesses.
For U.S. pork producers, the economics of trade are simple: Exports currently
add $33.60 to the price they receive for each pig. The South Korean and Latin
American bilateral FTAs will collectively increase the value of exports to
producers by an additional $12.60 per head, according to Iowa State University
economist Dermot Hayes.
The trade agreements also would give U.S. pork producers easy access to those
countries' markets, while their competitors in Canada and the European Union
would still face trade restrictions. That trade agreements have benefited the pork
industry is borne out by the tremendous increases in pork exports to countries
with which the United States has pacts.
Since the U.S.-Canada Free Trade Agreement went into effect in 1989, for
example, U.S. pork exports to Canada have increased by $421 million, and since
implementation in 1994 of the North American Free Trade Agreement with
Mexico, pork exports to that country have increased by $446 million.
To help sustain the jobs and other economic activity created by the North
Carolina pork industry, particularly in the face of rising feed costs -- the result of
the rapid rise in corn-based ethanol production -- the state's pork producers need
more markets in which to sell their products. Let's hope members of Congress
will follow their leaders and pass the pending FTAs. That would be good for U.S.
pork producers, and good for North Carolina's economy.