NAWG, U.S. Wheat Associates and more than 25 other agriculture organizations wrote Members of Congress this week urging them to work with the Obama Administration to pass pending free trade agreements and stem the tide of lost U.S. market share around the world.
Three agreements, with Colombia, Panama and South Korea, have been pending for more than three years. During the recent G-20 Summit in Toronto, President Barack Obama announced his intention to set a November deadline for removing outstanding obstacles to the implementation of the U.S.-Korea free trade agreement, or FTA.
The groups praised this move, noting that the Korean market is the fifth largest for U.S. agricultural exports, valued at $3.9 billion in 2009, and the pending FTA could expand those sales by almost half according to American Farm Bureau Federation analysis.
Still, while expressing appreciation for the President’s action with regards to Korea, the groups also voiced serious concern about the other agreements, particularly the one with Colombia.
On June 21, the Canadian Senate voted to implement a free trade agreement with Colombia, following approval by Canada’s House of Commons on June 15. The groups described to Members the severe competitive disadvantage this will create for U.S. producers.
“So, not only have we lost two or three years of benefits of duty-free or reduced tariff access to the Colombian market under a U.S. FTA, we now face the certainty that Canada’s producers will instead reap those benefits,” the coalition wrote.
“According to the American Farm Bureau Federation, the U.S.-Colombia FTA, if and when it is implemented, would result in U.S. agricultural export gains of more than $815 million per year at full implementation. But now that Canada has gained preferential access ahead of us, we are likely to be operating in catch-up mode for years to come.”
The letter touched particularly on the tough situation facing U.S. wheat producers, who will almost certainly lose their hard-won market share in Colombia when the Canadian agreement is finalized.
“An influential Colombian miller has said that without a U.S. FTA to keep tariffs in balance with tariffs on Canadian wheat, the U.S. share of the Colombian wheat import market could fall from around 70 percent to as low as 30 percent,” the letter told Members. “If that were to happen, U.S. Wheat Associates estimates that, at current export prices, failure to ratify the U.S.-Colombia FTA could lead to an annual loss of more than $70 million for the U.S. wheat industry.”
NAWG and U.S. Wheat strongly support immediate passage of all three agreements and a robust trade agenda including the negotiation of new agreements and easing of trade restrictions with Cuba.
For much more information on the current trade situation, including the letter sent this week, please visit www.wheatworld.org/trade.