UNITED NATIONS (BLOOMBERG) - The signing of a renegotiated free-trade agreement between the US and South Korea is spurring optimism that export markets for American farm goods won't shut down and may even expand.
US President Donald Trump and his South Korean counterpart Moon Jae-in signed the agreement on Monday (Sept 24) on the sidelines of the United Nations General Assembly, the first major trade deal the US president has forged amid rising trade tensions.
It's welcome news for US farmers worried that the closing of export markets, especially China, will exacerbate the impact of low prices due to expanding supplies of corn, soybeans, beef, pork and chicken.
South Korea is the sixth-largest export market for US agriculture, buying US$6.9 billion (S$9.43 billion) worth of farm goods last year, according to the American Farm Bureau Federation.
The free-trade agreement with the two countries has helped make South Korea the second-largest importer of US beef after Japan by sales. US pork exports have also risen.
"Renewal of our trade deal with South Korea is much-needed good news and help for our farmers and ranchers as the agricultural economy struggles," Zippy Duvall, the federation's president, said in a statement on Monday.
"Securing export markets for our products is critical, and we encourage the administration to continue to push for conclusion of other trade agreements."
Those include pacts with China, Mexico and Canada and looking to rejoin the Trans-Pacific Partnership, an agreement Trump pulled the US out of as soon as he took office. The so-called TPP agreement would boost US agricultural exports by US$4 billion per year, according to the federation.
"I am optimistic that the dominoes will continue to fall: KORUS, then a new Nafta, and new agreements with the European Union, Japan, and, most notably, China," Agriculture Secretary Sonny Perdue said in a statement on Monday.