The National Grain and Feed Association (NGFA) on Oct. 4 issued a statement strongly supporting prompt congressional ratification of long-delayed free trade agreements with South Korea, Colombia and Panama, calling such approvals imperative for U.S. access to these important agricultural export markets.
The NGFA, which long has supported each of the three trade accords, said it welcomed President Obama’s decision to submit them to Congress for ratification under so-called “fast-track procedures” that require an up-or-down vote within 90 days, without opportunity for amendment. The three trade accords have languished for more than four years since being negotiated initially during the Bush administration.
“Trade is absolutely vital if the United States is to secure economic growth and create new jobs, including in rural America,” said NGFA President Kendell W. Keith. “Exports represent up to one-third of total usage of U.S. feed grains and 50% of total usage of U.S. wheat and soybeans – either as raw commodity exports or as value-added products, such as meat. We look forward to working to secure ratification of these three significant trade agreements, which we believe merit strong support from all members of Congress.”
The NGFA noted that foreign competitors have negotiated and implemented trade accords with these important U.S. markets that have undercut U.S. agricultural competitiveness. For instance, the European Union-South Korea free trade agreement took effect July 1, while a Canadian-Colombia pact was implemented on Aug. 15.
A summary of the benefits of each of the three accords to U.S. agriculture is summarized below:
- South Korea Free Trade Agreement (KORUS FTA): Under the accord, nearly two-thirds of U.S. agricultural exports to South Korea will become duty-free immediately, including wheat, corn, soybeans for crushing, and other processed and high-value agricultural products. In fiscal 2010, the United States exported $2 billion in grains and feeds and $644 million in oilseeds and products to South Korea, which accounted for 54% of all agricultural exports to the key Asian market.
- Colombia Trade Promotion Agreement (CTPA): Under the CTPA, more than 80% of U.S. agricultural exports to Colombia will become duty-free immediately. Items that will receive immediate duty-free access include wheat, soybeans, soybean meal, and other processed and high-value agricultural products. In fiscal year 2010, the United States exported to Colombia $354 million in grains and feed ingredients, as well as $165 million in oilseeds and products, which accounted for 54% of all agricultural exports to that Latin American market.
The U.S. market share in Colombia, especially for feeds and grains, has been declining because of our competitors’ advantages with their own trade preference agreements. For example, the United States traditionally has been the top supplier of corn, wheat and soybeans to Colombia, accounting for 76% of the market as recently as 2007. But by 2010, U.S. market share had declined to 27% for these products, with the majority of the losses ceded to Mercosur partners Argentina and Brazil.
- Panama Trade Promotion Agreement (PTPA): Under the PTPA, more than half of U.S. agricultural exports to Panama will become duty-free immediately, including soybeans, soybean meal, wheat, barley, and other processed and high-value agricultural products. In fiscal 2010, the United States exported $152 million in grains and feeds and $71 million in oilseeds and products to Panama, which accounted for 55% of all agricultural exports to the Central American market.