October 10, 2006

US FTA with Columbia would hurt US beef producers

The latest free trade agreement (FTA) with Colombia would do more harm than good to the US cattle industry, R-CALF USA International Trade Committee Chair Doug Zalesky said.

Zalesky was testifying at the International Trade Commission (ITC) on the potential impacts to US cattle producers by the proposed Colombia Trade Promotion Agreement (TPA).

The TPA would do little to promote exports of US beef but would subject US cattle producers to increased competition from increased beef imports from Columbia Zalesky said.

Columbia's excess beef supplies and low per capita income would ensure that US beef exports to that country are limited. It has 25 million head of cattle and growing beef production capabilities and is also a net exporter of beef, Zalesky said.

Columbia may become a conduit for large volumes of cattle channeled from other Latin American countries since rules of origin are lax in the region, Zalesky added.

Although there were safeguards to prevent massive imports into the US, it expires after the tenth year of the agreement, Zalesky pointed out.

That means US cattle producers would be subject to abrupt price fluctuations after the quota expires, increasing the risks incurred by US producers.

R-CALF urged Congress to keep in mind that market dynamics need to be taken into account when the TPA comes up for consideration.