Farmers Losing Money, Market Share From FTA Delay
Tuesday, August 2nd, 2011
In a few short weeks, the United States will be the only major wheat provider for Colombian buyers not benefiting from permanent zero duty access, which will cut significantly into wheat growers’ share of that large and growing market – hurting both U.S. producers and Colombian buyers of their products.
That was main message from NAWG President Wayne Hurst at a press roundtable held Friday by the National Foreign Trade Council (NFTC), which promotes the expansion of trade.
Hurst participated in the event, which also included comments from Ed Gresser, the director of ProgressiveEconomy; Nick Giordano, vice president and counsel for international affairs at the National Pork Producers Council; and Bill Lane, Washington director for governmental affairs at Caterpillar.
In his prepared statement, Hurst reiterated the wheat industry’s strong support for immediate passage of all three free trade agreements that are currently waiting to go before Congress – with Panama, South Korea and Colombia.
He told the 11 national and D.C.-focused reporters in attendance that the most important of these to wheat exports is the agreement with Colombia, which imports 97 percent of its wheat needs. Colombia has also routinely been the largest wheat export market in South American for U.S. wheat producers in recent years.
However, U.S. wheat market share in Colombia has declined from a high of around 70 percent to about 45 percent in less than three years, particularly since Argentina gained preferential duties in 2006 and eliminated all duties in 2009 under the Mercosur agreement.
Canada is poised to gain duty-free access later this summer when it implements its own FTA with Colombia, which will drop U.S. market share by an additional 50 percent or more.
“Delaying these free trade agreements isn’t just a political game – it’s messing with real lives, here and abroad,” Hurst told reporters. “And, it’s doing harm that can’t be easily undone once Colombian millers switch preferences from our wheat to someone else’s.”
The export market development organization that works for U.S. wheat producers, U.S. Wheat Associates, estimates that U.S. growers stand to lose up to $100 million in sales per year based on the delay in implementation of the Colombian FTA.
Both NAWG and U.S. Wheat Associates strongly support the pending free trade agreements and continue to push for their quick consideration.
This week, both groups joined more than 100 other organizations in writing President Barack Obama and Congressional leaders to again urge quick passage of the measures.
That letter and a newly-updated briefing paper about the effects of continued FTA delays to the wheat industry are online at www.wheatworld.org/trade.
National Association of Wheat Growers