Agriculture is essential to the prosperity of North Carolina, particularly its rural communities. Farm exports now account for one-third of the state's $9.6 billion in farm cash receipts.
International trade is crucial to the state's 52,000 farmers. Over the past decade, North Carolina's agricultural exports grew by 79 percent, directly adding 1,500 new jobs. In 2010, those exports accounted for 23,550 North Carolina jobs. Despite the success of agricultural exports in domestic job creation, the nation's ability to trade openly in the world marketplace is in jeopardy.
There are more than 600 bilateral and regional trade agreements in place or under negotiation worldwide. The U.S. has a share in fewer than 25 of these trade deals, according to the American Farm Bureau.
Of particular concern are free-trade agreements (FTAs) with South 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 such as poultry, pork, soybeans and cotton.
So, why is this important for average North Carolinians?
North Carolina ranked 13th in exports among all 50 states in 2008. In 2010, North Carolina's agricultural exports were pegged at $2.7 billion. However, these exports also produced an additional $3.6 billion in economic activity, for a total economic output of $6.3 billion.
The U.S. Department of Agriculture's Economic Research Service currently estimates North Carolina's top five agricultural exports as tobacco leaf — $601.3 million; live animals and meats — $524.7 million; poultry and products — $428.1 million; soybeans and products — $267.3 million; and cotton and linters — $249 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.
In 2010, U.S. agricultural exports grew to $108.6 billion, produced an additional $142.3 billion in economic activity for a total economic output of $251 billion. Also in 2010, increased agricultural exports supported nearly 935,000 U.S. jobs. Over the last decade U.S. agricultural exports grew by 106 percent, directly adding nearly 175,000 new jobs, according to the American Farm Bureau.
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 Colombia and Panama 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.
Competing nations take advantage of our inaction. The European Union's trade agreement with South Korea went into effect July 1. Australia, Chile and Canada are also capturing potential U.S. market share in the three countries.
Our market share in Colombia, for example, has plummeted from 46 percent to 21 percent over the past several years. In 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.
The Farm Bureau urges the president to move and Congress to pass the South Korea, Colombia and Panama trade agreements. Without action, our role as a major trading partner diminishes and U.S. farmers lose market opportunities.
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