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Urgency to Ratify FTA Highlighted at USGC Trip

by 5m Editor
20 December 2010, at 8:44am

US & COLOMBIA - US Congress may have tabled the United States-Colombia Trade Promotion Agreement (CTPA) for the time being, but Colombian producers have not forgotten the pending free trade pact, the US Grains Council learned.

Following a recent USGC-conducted workshop in Colombia, Kurt Shultz, USGC regional director in Latin America and the Caribbean Region, said the agreement remains on the minds of many Colombian industry representatives. According to Mr Shultz, the seminars were very successful but also served as a reminder that without a ratified trade agreement, both US producers and Colombian end-users remain at a disadvantage.

“During one of our meetings, a poultry producer told us he found our visit very valuable. He said it allowed him and other producers to directly interact with the Council and US corn farmers and express the need for Congress to ratify the FTA (free trade agreement) with Colombia to ensure access to duty-free US corn,” Mr Shultz said.

Without an FTA, US agricultural products are subject to tariffs ranging from 5-20 per cent, making it expensive for Colombian end-users to purchase quality feed grains. Meanwhile Argentinian, Brazilian and Canadian grain imports pay half or no duties compared to US exports. For US corn producers, this has resulted in a mere 38 per cent market share in 2010 in Colombia– a significant decrease from its traditional 90 per cent range.

“Considering the fact that Colombia imports 80 per cent of the corn it consumes, the lack of a ratified CTPA is very damaging to the United States,” Mr Shultz said.

The US corn sector is not the only player feeling the effects; other US commodities also stand on the sidelines as they, too, watch the game play on without them. US sorghum producers, for example, can do nothing but cringe as Colombia currently imports 200,000 tons (7.9 million bushels) of Argentine sorghum, sales the United States would have a good chance of capturing with a ratified FTA.

US barley producers also hope for the trade pact to pass as they watch Colombia import 200,000 tons (9.2 million bushels) of barley a year from other countries. US wheat exports of more than 600,000 tons will be lost to Canada next year with the passage of the Canadian FTA with Colombia.

“In 2009, Colombia imported $900 million worth of US agricultural products. Without a ratified CPTA, US market share in Colombia will only continue to erode in every sector as the country pursues successful FTAs with competitor countries,” Mr Shultz said. “The United States must act now or else remain at a significant disadvantage in this part of the world.”