For The Week Ending March 16, 2012

U.S.-KOREA FTA ENTERS INTO FORCE
The U.S.-Korea Free Trade Agreement (KORUS FTA) entered into force March 15, 2012. Before implementation of the KORUS FTA, U.S. pork exports to South Korea were subject to significant tariffs of 25 percent on frozen pork products and 22.5 percent on fresh or chilled pork products. Under the agreement, tariffs will be eliminated on all U.S. frozen pork and some processed pork products Jan. 1, 2016, and fresh-chilled pork will be duty-free 10 years after implementation of the agreement. In 2011, South Korea was the fifth largest volume and value market for U.S. pork exports, totaling 188,307 metric tons worth almost $497 million. According to Iowa State University economist Dermot Hayes, the FTA with Korea will create 9,100 direct U.S. pork industry jobs, increase annual U.S. pork exports by $687 million and add $10 to the price producers receive for each hog. The U.S. pork industry was instrumental in getting the Korea FTA approved. In December 2010, when the United States and Korea were at an impasse over trade in autos, the U.S. pork industry agreed to move back the effective date for when much of its exports enter Korea at a zero-tariff rate.

 

INITIAL EPA SCIENCE ADVISORY BOARD MEETS IN NORTH CAROLINA
Members of the U.S. Environmental Protection Agency Science Advisory Board (SAB) met this week in Research Triangle Park, N.C., to review two EPA Office of Air Quality papers – “Draft-Development of Emissions Estimating Methodologies for Broiler Animal Feeding Operations” and “Draft-Development of Emissions Estimating Methodologies for Lagoons and Basins at Swine and Dairy Animal Feeding Operations” – on emissions from animal production. NPPC Thursday made an introductory oral presentation to the SAB on the advisory panel’s focus while it reviews data from the National Air Emissions Monitoring Study (NAEMS) and the draft Emission Estimating Methodologies that EPA developed. NPPC has offered to work with the SAB and EPA’s Office of Air to supply analysis of data on the structure of the U.S. modern hog sector. NPPC also will be submitting more detailed comments on the form of EPA’s drafts as well as on the technical and scientific nature of how EPA has characterized the information at the end of the agency’s recently announced 90-day comment period, which concludes June 11, 2012.

 

THE PHILIPPINES REMOVES RESTRICTIVE IMPORT BARRIER
An agreement was reached last week between the United States and the Philippines to resolve many of the longstanding issues related to a Philippines administrative order (AO). In November 2010, AO22 was implemented by the Philippine Department of Agriculture and contained strict mandates pertaining to the refrigeration, traceability, labeling and packaging requirements for frozen pork. These restrictions favored domestic pork production and had a markedly adverse effect on 2011 U.S. pork exports to the Philippines. In resolving the AO22 issues, the Philippine Department of Agriculture agreed to eliminate the requirement for pre-wrapping and thawing of frozen meat prior to sale, to make meat temperature (rather than the temperature inside the container) the complying factor for sale and to allow the cutting/portioning of meat outside the container. The agreement also included assurances that confiscations would immediately stop, Veterinary Quarantine Certificates (VQCs) would not be used to restrict imports and the “test and hold” system would immediately revert to random sampling. The next step will be an exchange of letters that puts the understanding in writing and publication of draft AOs that will supersede AO22. This should eliminate the major impediments to trade in meat and poultry products.  In addition to significantly easing conditions on frozen meat handling and marketing, the new AOs will impose an eight-hour time limit on the marketing of “warm” meat, with the clock starting shortly after slaughter. In 2011, the Philippines was the eighth largest volume and value market for U.S. pork exports, totaling 38,884 metric tons valued at $92 million. The Philippines has the potential to become a major market for U.S. pork products with the removal of the current pork import restrictions. NPPC was instrumental in achieving this resolution to AO 22 through its close work with U.S. and Philippine officials and industry representatives.

 

SENATE AGRICULTURE COMMITTEE HOLDS FARM BILL HEARING
The Senate Committee on Agriculture, Nutrition and Forestry Thursday held its fourth Farm Bill hearing. Titled “Risk Management and Commodities in the 2012 Farm Bill,” the hearing evaluated the need for and cost effectiveness of risk-management tools available to farmers and how the federal government can provide appropriate risk-management tools while making the best use of limited resources. Committee Chairwoman Debbie Stabenow, D-Mich., said that improving crop insurance and remodeling farm programs are key goals as the committee works to develop solid risk-management tools for farmers. With testimony ranging from farmers to commodity organizations to other stakeholders, all witnesses expressed the need for improving risk-management tools as a way to keep producing a safe and inexpensive food supply for the United States and the world. To read testimonies and watch the hearing, click here.

 

SENATE PANEL CONSIDERS RUSSIA’S WTO ACCESSION
The Senate Finance Committee invited a panel of private-sector representatives to testify on the implications for the United States of Russia’s accession to the World Trade Organization (WTO). Russia is expected to become a member of the WTO by mid-2012, a move that will compel Congress to vote on extending permanent normal trade relations (PNTR) status to Russia and on repealing the Jackson-Vanik amendment, which affects U.S. trade with countries that restrict freedom of emigration and that have poor records on human rights. The U.S. pork industry has concerns about a number of matters related to Russia’s WTO accession package, primarily related to non-science-based barriers that have severely affected U.S. pork exports to Russia. Expressing the concerns of the pork industry at this week’s hearing, Sen. Charles Grassley, R-Iowa, urged the White House to ensure that Russia lives up to the spirit and responsibilities of the WTO with regard to agriculture and particularly pork. Grassley stated that he wants to see Russia uphold its commitments to the WTO before Congress deals with Jackson-Vanik. The Russian market is characterized by volatility and high risk because of inconsistent application of unscientific standards for pathogens (e.g., zero tolerance for pathogens such as salmonella), trichinae-related testing/freezing requirements and a possible ban on ractopamine. Since reaching a record level of more than 200,000 metric tons in 2008, U.S. pork exports to Russia have fallen by 60 percent because of restrictions based on non-science-based sanitary-phytosanitary issues.

 

NPPC MEETS WITH COLOMBIAN OFFICIALS ON U.S.-COLOMBIA FTA
NPPC Vice President and Counsel for International Affairs Nick Giordano traveled to Colombia this week to meet with U.S. and Colombian government officials to discuss implementation of the U.S.-Colombia Free Trade Agreement (FTA) and market access for U.S. pork exports. NPPC is working to get the U.S.-Colombia FTA implemented as soon as possible but is concerned about Colombia’s current trade restrictive trichinae requirements. Colombia currently requires that the United States freeze pork as a mitigation against trichinae, despite the negligible risk of trichinosis in the U.S. commercial herd. According to Dr. Ray Gamble, president of the International Commission on Trichinellosis, the odds of trichinae in the U.S. commercial pork supply is 1-in-300 million. This is well within the range of negligible risk, which is defined by the European Union as 1-in-1 million. Colombia’s trichinae mitigation requirement should be removed from the export certification before the final implementation of the U.S.-Colombia FTA, according to NPPC. The full implementation of the U.S.-Colombia FTA will generate an additional $68.9 million in U.S. pork exports and create 919 direct U.S. pork industry jobs while raising live U.S. hog prices by $1.15, according to Iowa State University economist Dermot Hayes.

 

WHAT’S AHEAD

 

NPPC BIANNUAL LEGISLATIVE ACTION CONFERENCE TO BE HELD NEXT WEEK
Pork producers from across the country will travel to Washington, D.C., to attend NPPC’s Spring Legislative Action Conference, where they will meet with members of Congress to discuss issues of importance to the U.S. pork industry. Producers will receive updates on legislative issues from NPPC staff and attended NPPC’s Capitol Hill-famous “Rack of Pork” congressional reception.

 

PORK PRODUCERS TO PARTICIPATE IN NPPC GRASSROOTS PROGRAM
A diverse group of individuals in the pork industry will return to Washington, D.C., to participate in the second of three sessions of NPPC’s Pork Leadership Institute (PLI). The program provides producers with information about the pork industry’s legislative issues and teaches them how to interact with their lawmakers. For more information on PLI, contact Bryan Humphreys at 515-278-8012.

 

HOUSE AGRICULTURE COMMITTEE FARM BILL FIELD HEARING SET FOR ILLINOIS
The House Agriculture Committee will hold the second of four Farm Bill field hearings Friday, March 23 at Carl Sandburg College, Galesburg, Ill. For the complete lineup of witnesses, click here.

 

NPPC TO BRIEF CAPITOL HILL STAFF ON ANIMAL WELL-BEING ISSUES
NPPC Chief Veterinarian Dr. Liz Wagstrom, Minnesota veterinarian and pork producer Dr. Mark Fitzsimmons, Michigan pork producer Bob Dykhuis and Director of Swine Welfare for the National Pork Board Sherrie Neikamp next Thursday will present an educational briefing to Capitol Hill staff on “Farm Animal Welfare: How We Really Treat Our Animals.”

 

HOUSE AGRICULTURE SUBCOMMITTEE TO HOLD HEARING
The House Agriculture Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture next Wednesday will hold a public hearing “to identify duplicative federal rural development programs.”

 

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