Industry groups praise progress on Colombia FTA

by World Grain Staff
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WASHINGTON, D.C., U.S. — Leaders representing the U.S. soybean, corn and wheat industries said on April 6 they were pleased with the progress made on the U.S.-Colombia Free Trade Agreement (FTA).

After years of negotiations and advocacy for the passage of the FTA, a deal was struck on labor, clearing the way for liberating the flow of trade between the U.S. and this strategic trading partner in Latin America.

“The U.S. Grains Council (USGC) compliments the administration and congress for their support of U.S. producers and for constantly keeping the issue of free trade on the table over these last several months,” said USGC Chairman Terry Vinduska. “We are also grateful for the cooperation the Colombian government has provided the council in helping U.S. lawmakers understand the importance of free trade agreements between the U.S. and these two countries.”

Wheat industry leaders estimate that without the FTA, U.S. wheat farmers face a potential loss of sales currently valued at about $100 million per year.

National Association of Wheat Growers President Wayne Hurst, a wheat grower from Burley, Idaho, U.S., and U.S. Wheat Associates Chairman Don Schieber, a wheat grower from Ponca City, Oklahoma, U.S. issued the following statement.

“U.S. wheat producers need this FTA to compete in the Colombian market on the basis on quality and supply with wheat from other countries. Argentine wheat enjoys trade preferences under the Mercosur agreement. Canada and Colombia have ratified a separate FTA that will eliminate import tariffs on Canadian wheat and most other agricultural goods likely by July of this year. When that happens, the existing tariff and price band system applied to U.S. wheat imports will, in effect, make Canadian wheat significantly cheaper than U.S. wheat. As a result, Colombian millers who want to keep buying U.S. wheat would be forced buy more wheat from Canada because of the significant tariff disadvantage alone. The U.S.-Colombia FTA would remove that barrier.

“There is more work to be done before that happens. We encourage the Obama Administration to prepare and submit the FTA to the House of Representatives for a ratification vote as soon as possible. Assuming Congress ratifies the agreement, several months will be needed before the FTA is implemented. The National Association of Wheat Growers and U.S. Wheat Associates will continue to work to encourage rapid approval of the U.S.-Colombia FTA and FTAs with South Korea and Panama.”

The National Corn Growers Association (NCGA) said the Colombia FTA would provide immediate access for U.S. corn growers to Colombia’s roughly 2.1 million tonne market for corn duty free.

“Colombia has traditionally been one of the Top 10 export markets for U.S. corn,” NCGA President Bart Schott said. “This is an important market for U.S. farmers and we do not want to watch this market slip away to our largest competitors. America’s corn producers stand ready to produce enough corn to meet the increasing global demands for food, feed, fuel and fiber.”

During marketing year 2007-08, the U.S. exported 114 million bushels of corn to Colombia, with an estimated value of nearly $627 million. U.S. corn exports declined dramatically during the 2009-10 marketing year, with only 36 million bushels exported, valued at $152 million. The decline in exports reflected a loss of $475 million to the U.S. economy.

“We support the pending Free Trade Agreement with Colombia, as well as those with Korea and Panama,” Schott said. “NCGA remains committed to the development and maintenance of fair and open global trade policies and we look forward to working with Congress to ensure passage of these important FTAs.”

For the soybean industry, the FTA will eliminate tariffs ranging from 5% to 20% on soybeans, soybean meal and soybean flour, and phase-out the 24% tariffs for crude soybean oil over 10 years and refined soybean oil over five years. The agreement will provide immediate duty-free access for crude soybean oil through a 31,200-ton quota with four percent annual growth.

“As a result of delays in approving the pending FTA, the U.S. has lost market share to competitors in Colombia. In 2010, U.S. soybean product exports to Colombia were valued at $103 million, down 64 percent from 2008,” said American Soybean Association President Alan Kemper, a soybean producer from Lafayette, Indiana, U.S. “ASA is also urging approval of the pending FTAs with South Korea and Panama that would significantly improve access to foreign markets for U.S. soy and livestock products. These three trade agreements combined represent almost $3 billion of additional agricultural exports to these trading partners.”
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