Des Moines Register
09-15-06
Iowa View: Increased trade with Vietnam would benefit Iowa
By SAM CARNEY
Agriculture is an important part of the economy in Iowa, the Midwest and much of
the country. And exports of agricultural products - indeed of all goods and
services - are vital to the economy of the United States.
For Iowa, exports totaled $7.3 billion in 2005, and export-supported jobs account
for an estimated 8 percent of the state's total private-sector employment, or more
than one of every 13 jobs, according to the U.S. Commerce Department's
International Trade Administration and the Census Bureau.
With 96 percent of the world's population living outside the country, it is
imperative that the United States continues to expand and to gain access to
foreign markets. One important market is Vietnam, which, with more than 84
million people, ranks 12th in world population.
The Southeast Asian nation has been a substantial destination for U.S.
agricultural exports, which in 2004 exceeded $159 million, including more than
$3.3 million in pork exports.
As is true for much of Asia, land-scarce Vietnam is a natural importer of products
such as pork, beef, corn and soybeans, which Iowa produces in abundance.
The potential to significantly increase trade to that country, where pork
represents 72 percent of the meat consumed, is only a congressional vote away.
With Congress back from a month-long break, it may take up legislation to
approve Permanent Normal Trade Relations (PNTR) status for Vietnam. PNTR
won't require the United States to make any trade concessions, but will allow
U.S. exporters to take advantage of Vietnam's accession to the World Trade
Organization. (The country is expected to join the WTO before the November
meeting of the 21-nation Asia-Pacific Economic Cooperation.)
Once its WTO accession is fully implemented, Vietnam's tariff rate on most
agricultural products imported into the country will be reduced to 15 percent or
less from a current average of 27 percent; the rate on pork would fall from 30
percent.
That would mean a jump to $16.5 million by 2012 in U.S. pork variety meat
exports to Vietnam from about $3.3 million now, according to Iowa State
University economist Dermot Hayes. He estimates that U.S. live hog prices
would increase by $0.52 per hog. With 30 million hogs, Iowa pork producers
would realize more than $15.6 million in additional revenues.
New and expanded market access through trade agreements has been the most
important catalyst for increased U.S. trade. For U.S. pork producers, the
implementation of trade agreements such as the North American Free Trade
Agreement in 1994, the WTO Uruguay Round Agreement in 1995 and the
Australia Free Trade Agreement in 2004 have since the mid-'90s helped increase
exports of pork and pork products by more than 389 percent in volume terms and
more than 361 percent in value terms.
Undoubtedly, the U.S. pork industry would benefit tremendously from increased
trade with Vietnam. And all it will take for that to happen is for Congress to
extend to Vietnam the same trade status granted to all of the WTO's 149
member-nations.
*****
SAM CARNEY is a pork producer from Adair and a member of the board of
directors of the National Pork Producers Council.