Despite the fact there’s now more competition in Colombia than ever before, its aggressive pursuit of new trade negotiations means its economy is growing. With the passage of our agreement and the removal of trade barriers, there is significant opportunity for the U.S. to restore its former Colombian market share.
The Colombian economy is projected to exceed 4% growth annually over the next three years, according to Gaibler. Its per capita income has grown steadily over the past decade and is projected to continue increasing until 2015. As Colombians’ middle class and income continue to grow, the consumption of animal proteins will follow.
South Korea: looking long-term
Unlike Colombia, whose high tariffs caused a sharp decline in U.S. imports, market access to South Korea remained relatively open while the FTA was pending. Corn tariffs, for example, were only at 3% as opposed to Colombia’s 15% tariff on grain.
“Korea is our No. 3 export market, so having the ability to market corn and corn co-products duty-free with the implementation of this FTA is a tremendous benefit,” says NCGA’s Gallo.
But the main objective of the South Korean agreement was not swift removal of duties and tariffs. More importantly, the U.S./South Korea agreement facilitates a long-term strategy to build a stronger relationship and a formalized channel through which to negotiate nontariff trade barriers.
Not all countries quickly accept the innovative agricultural technologies and techniques used in the United States. Regulatory restrictions on pesticide residues, biotechnology and production techniques are all trade-inhibitive to U.S. ag products.
So before implementation of any Free Trade Agreement, the two governments must determine if there are regulatory barriers to resolve.
Korea has historically been proactive in adopting biotech events as they’re approved in the United States, and according to USGC’s Gaibler, there are currently no significant barriers to address. But in the absence of an FTA, Korea would have been able to implement trade-restricting regulations without any obligation to the United States to work on a resolution. The United States’ Free Trade Agreement with South Korea will prevent any unforeseen nontariff barriers in the future.
Gary C. Martin, president and CEO of the North American Export Grain Association, says without a commitment to open markets, there is a risk of shocking the marketplace when a new technology or production technique is implemented in the United States.
“[The FTA] allows us to deal with some of our concerns on a formalized and established basis,” says Martin. “It provides for increased predictability and transparency so more people can participate, efficiencies can be brought into the marketplace and we can have confidence that our product is going to be accepted once it’s shipped,”
The agreement with Korea also represents an in-road to the Asian market as a whole. The growth in Asia — led by China — that is anticipated in the coming decade, makes the Asian market especially attractive, says Martin.
The U.S. government is currently engaged in talks to form the Trans-Pacific Partnership with several nations, including Malaysia, Singapore and Vietnam. Martin says the South Korean FTA is a stepping stone in the right direction toward more favorable U.S. trade relations with other Asian nations.
“The implementation of the U.S./South Korea Free Trade Agreement establishes the fact that we can negotiate and conclude an agreement with a country with an economy as significant as Korea’s,” says Martin. “The Trans-Pacific partnership in many ways builds on existing sets of bilateral agreements that facilitate trade in more ways than just reducing tariffs.”
Panama: logistical key
Panama is the smallest market of the three FTAs signed in October, but its central role in global trade from a logistical standpoint makes it as vital to the United States as the rest. Serving as the gateway from the Atlantic Ocean to the Pacific Ocean, more than 1 million vessels have passed through the waterway since its opening in 1914, according to 2010 data from the Panama Canal Authority.