NORTHWEST ARKANSAS — Northwest Arkansas and the state poultry industry have nearly 18 million reasons to support a free trade agreement being chiseled out by the U.S. and South Korea, according to Jong-hyun Choi, minister for economic affairs at the Korean Embassy in Washington.
Choi visited with Springdale business leaders Thursday in the government's latest campaign effort supporting the trade accord that will eliminate hefty tariffs on chicken exports to South Korea.
Despite the 6,700-mile distance between Springdale and Seoul, Tyson Foods enjoys an important relationship with South Korea, according to Gary Mickelson, spokesman for Tyson spokesman.
South Korea was Tyson's fourth largest international customer purchasing $204 million in food products in 2009.
"We've had a business office in Seoul since the late 1990s. Korea has historically been a significant export market for our beef and pork and a small but growing market for our chicken," Mickelson said.
Tyson supports the trade agreement because of the benefit to the U.S. meat protein industry, as well as overall economic relations between the two countries, according to Mickelson.
"We hope current negotiations will be completed soon and that President Obama will ask Congress to approve the agreement next year," Mickelson said.
Gene Pharr, a poultry grower and state Farm Bureau member from Lincoln, sees the trade agreement as a positive way to grow chicken exports and support jobs at home.
Chicken leg quarters, wings and paws represent the state's second largest export to South Korea, according to Choi.
In the first eight months of this year, Arkansas poultry companies sold $17.4 million of poultry to South Korea despite tariffs ranging from 20 to 27 percent, according to the Commerce Department.
"It's one of the fastest growing poultry markets in recent years. Korea has a very modern poultry industry of its own, so reduction and eventual elimination in the tariffs will allow U.S. processors to compete more evenly with Korea's domestic market," said Bill Roenigk, vice president and economist with the National Chicken Council.
He said South Koreans have more money to spend because South Korea's economy has recovered quicker than the United States.
The poultry industry is also very interested in the nontariff clauses in the trade agreement.
Choi said the agreement has mechanisms in place to avoid trade disruptions from nonscience based concerns as recognized by the World Trade Organization.
Roenigk said this is just as important as tariff reduction given the lessons learned following avian influenza bans and the latest chlorine-use concern that stopped trade with Russia for the first eight months of this year.
"Shrinking chicken exports to Russia and high tariffs in China create an urgency for the U.S. to work aggressively with Korea to expand this market as the doors in other markets are closing," Roenigk said.
Choi said the two nations would meet Nov. 11-12 at the G-20 Summit in Seoul.
"President Obama hopes to take a final draft to the U.S. Congress when he returns from the G-20. The agreement has bipartisan support so we are hoping the midterm elections will have no major impact," Choi said.
Randy Veach, president of Arkansas Farm Bureau, supports the trade agreement overall.
"It could mean a lot to Arkansas agriculture, but I would like to see more conversations and work done to include market access for U.S. rice and expanded access for beef which has been restricted to cattle 30 months and younger since 2007," Veach said.
Korean U.S. Free Trade Agreement
Immediate Tariff Elimination
• Soybeans for crushing
• Corn for feed
• Cotton
• Wheat
• Hides and skins
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Tariff Reductions Over Time
• Frozen chicken (leg quarters) 10 years
• Frozen chicken (breast wings) 12 years
• Pork 10 years
• Beef 15 years
Source: U.S. Korea Business Council