Pending free trade agreements mean millions for Nebraska's economy

In a recent opinion column by Curtis W. Ellis with the American Jobs Alliance and John K. Hansen with the Nebraska Farmers Union printed in The Gazette, the claim was made that the pending Free Trade Agreements (FTAs) with South Korea, Colombia and Panama would send Nebraska jobs overseas and harm Nebraska's agricultural economy. The authors also claimed that numbers being used to tout the benefits of the FTAs seemed to be pulled out of thin air.

The truth, however, is that the pending FTAs would lead to Nebraska agricultural trade increases of more than $123 million each year and add over 1,100 new Nebraska jobs. Nationally, the agreements would add nearly $2.5 billion in agricultural trade increases and create over 22,000 jobs.

South Korea is by far the biggest of the pending agreements. When it's fully implemented, Nebraska is projected to see ag export gains of more than $101 million a year, including $68 million in beef sales.

Our exports of corn for feed will drop by some $1.3 million, but that corn will instead go to feeding the beef that will be sold to South Korea. Our pork exports will go up more than $11 million and soybeans more than $5 million, with much of that gain likely being food-quality soybeans.

Nebraska stands to gain about $20 million from free ag trade with Colombia. The number would be higher but for the fact that while the U.S. has delayed making an agreement, Colombia has been signing trade deals with our competitors, other South American countries, who are likely to hold on to their share of the Colombian market. Between 2008 and 2009 the U.S. saw a nearly 50 percent drop in our agricultural exports because Colombia passed FTA's with Brazil and Argentina. Colombia also is negotiating with Canada and the European Union; deals with them could shut the United States out of any share of the Colombian market.

With the agreement, Nebraska wheat producers are expected to ship about $3.5 million of their product to Colombia each year, and our corn exports are projected to increase more than $7.5 million.

The total Nebraska impact of the Panama FTA is pegged at about $1.6 million a year, with the biggest gains coming in sales of corn ($751,800) and soybeans ($373,900) as duties are eliminated.

These numbers weren't a result of "fuzzy math" as Ellis and Hansen would have you believe. The American Farm Bureau Federation's estimates were calculated from a significant economic study released in 2011 by the U.S. Department of Agriculture's Economic Research Service. The U.S. International Trade Commission study that has been used to hype problems with the FTAs was completed in 2007. I believe we can all agree that there have been several significant global economic changes that have affected trade since 2007, including increased energy and agricultural commodity prices, a worldwide financial crisis, and considerable shifting of global trade patterns. Ellis' and Hansen's use of this outdated data is simply intellectually dishonest.

It is also important to note that the growth of imports from South Korea, Colombia and Panama to the U.S. would primarily complement U.S. agricultural production, rather than serve as a substitute. Agricultural imports to the United States from these three trading partners are primarily coffee, bananas, cut flowers, baking-related products, flavored waters, some processed products, ethnic foods and savory snack foods -- not the main commodities produced in Nebraska or in many areas of the U.S.

While Ellis and Hansen attempt to argue their points using outdated data and generalizations, the truth is that the pending FTAs with South Korea, Colombia and Panama are a win for agriculture and a win for Nebraska. It is difficult to believe they would cast aside new market and job opportunities for Nebraskans in such a cavalier manner, given the nation's struggling economy.

-- Keith Olsen is president of the Nebraska Farm Bureau Federation.