US pork producers to lose out on Canada-Colombia FTA

The Canadian Senate recently gave final approval to a free trade agreement (FTA) with Colombia, ensuring that exports of Canadian pork products and many other food and agricultural commodities will have immediate market-access advantage over US products in the Colombian market.

 

The US and Colombia signed a free trade agreement on November 22, 2006 – now more than three and a half years ago. The Colombian Senate in 2007 voted to approve the agreement by a margin of 55-3 and the House by a margin of 85-10. The US Congress has not yet begun debate on the implementing legislation.

 

The US-Colombia FTA, when fully implemented, would raise Live US hog prices US$1.15 above what would otherwise be the case, experts said. With Canada's action and with the failure of the US government to implement the US-Colombia FTA, trade benefits now will shift to Canadian pork producers. If the US does not implement its FTA with Colombia, the US will be completely out of the Colombian pork market within 10 years because of Canada's FTA tariff advantage, according to experts.

 

"It is unfortunate that our producers have to pay the price for US inaction on trade," said Sam Carney, president of the National Pork Producers Council (NPPC) and a pork producer from Adair, Iowa. "Canada will gain the inside track on future export opportunities in the sizeable and growing Colombian market."

 

The US-Colombia FTA is one of three that are pending approval by Congress. Agreements with South Korea and Panama also have been awaiting action for more than three years. Panama also recently finalised an FTA with Canada, and South Korea is nearing completion on a deal with the EU, so those markets are also in jeopardy of being lost to competitors. The US FTA with South Korea alone would add US$10 to the price of each US hog sold, analysts said.

 

NPPC has been calling for action on all three FTAs for years, pointing out the enormous risk of letting other countries move forward first. Now that the risk is becoming reality, it is critical that the US act quickly to at least keep its exports on a level playing field.