Columbia FTA progresses

There are three free trade agreements that, if implemented, would represent nearly $2.5 billion in additional U.S. exports. The stalling trade agreements with Panama, Columbia and South Korea are costing U.S. agriculture huge losses in potential exports and lost market share. For this reason, there was cause for celebration with the recent progress in the FTA with Columbia.

President Barack Obama and his team of negotiators successfully completed an Action Plan to resolve the issues that have been holding up the U.S.-Colombia Free Trade Agreement (FTA). This will now allow Congress to move forward with consideration for approval. The FTA will create new opportunities for American farmers and ranchers in the Colombian market.

“U.S. farmers and ranchers have been losing market share in Colombia to our competitors who have trade agreements with the country. It’s time to turn the tide and recoup our losses. Colombia has duty-free access to the U.S. market, while our products face excessive tariffs to sell to Colombia’s market. When implemented, the Colombia FTA would level the playing field for U.S. farmers and ranchers by eliminating these tariffs,” said Bob Stallman, American Farm Bureau president. “The Colombia, South Korea and Panama agreements will create expanded markets for American farm and ranch products and boost our overall economy. Together, the three agreements represent nearly $3 billion of additional agricultural exports from the United States and could generate as many as 27,000 new U.S. jobs.”

The Colombian National Congress overwhelmingly approved the trade agreement, which, when approved by the U.S. Congress and fully implemented, will add $1.15 to the price producers receive for each hog marketed, according to Iowa State University economist Dermot Hayes. The agreement will increase U.S. pork exports to the South American country by $68.9 million and help create 919 U.S. pork industry jobs.

In addition, the Colombia FTA will benefit soybean farmers by immediately eliminating tariffs ranging from 5% to 20% percent 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 5 years. The agreement will provide immediate duty-free access for crude soybean oil through a 31,200-ton quota with 4% annual growth.

During marketing year 2007-08, the United States 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. And, without this FTA, U.S. wheat farmers face a potential loss of sales currently valued at about $100 million per year.