September 18, 2009

 

The American Meat Institute (AMI) and National Corn Growers Association (NCGA) are urging for a quick passage of a Free Trade Agreement (FTA) with south Korea and a Trade Promotion Agreement (TPA) with Colombia which will benefit sales of US meat and grain.

 

Colombia, the US' tenth-largest trading partner worldwide in agricultural and livestock products, is an important market for US beef and beef variety meat exports.

 

On that basis, the US-Colombia TPA not only provided an opportunity to level the playing field, but it also provided a significant opportunity to expand US beef and beef variety meat sales to the Colombian market, said Patrick Boyle, AMI president and chief executive officer.

 

The US beef and pork industries stand to receive significant benefits from the phased elimination of import duties on their products by South Korea, but the country was moving forward with initiatives to negotiate and sign free trade agreements with Australia and the EU, Boyle said.

 

For this reason, the competitive advantage to the US beef and pork industries that should stem from the FTA could be lost if passage of the agreement by the legislature of either country is delayed much longer, he said.

 

The free trade agreements, which would allow greater market access for US corn and insure strong demand, have been signed by the countries and are awaiting congressional approval.

 

In a year with corn prices shrinking and input costs increasing, additional markets would aid American corn farmers, said Darrin Ihnen, NCGA first vice-president.

 

The Colombia FTA would provide immediate access to Colombia roughly 82 million-bushel market for corn at zero duty.

 

After the first year of the agreement, Colombia would raise the amount of corn imported at zero duty by five percent compounded annually for the next 12 years.

 

The FTA with the South Korea would provide immediate duty-free treatment for feed corn, NCGA said. Over the last seven years, the South Korea has imported an average of 344 million bushels a year, with 40 percent coming from the US.

 

The NCGA said the US could also export corn co-products such as dried distiller grains to the South Korea and Colombia.

 

Wheat producers are also supportive of the Colombia FTA, according to comments submitted by the US Wheat Association and the National Association of Wheat Growers.

 

Colombia imports 97 percent of its wheat consumption needs and is the eighth largest market in the world for sales of US wheat valued at US$225 million last year.

 

A fully implemented FTA will remove tariffs on US wheat imports upon ratification and level the playing field, ensuring US wheat can compete in the Colombian market.