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Canada-Colombia FTA puts U.S. wheat market at risk

The Canadian Parliament has beaten the U.S. Congress to the punch with a free trade agreement with Columbia that could give Canadian wheat producers a decided advantage over U.S. farmers, according to a joint statement by U.S. Wheat Associates (USW) President Alan Tracy and Dana Peterson, Chief Executive Officer, National Association of Wheat Growers (NAWG).

“The Canadian parliament has ratified a bilateral free trade agreement (FTA) with Colombia that will, when implemented, allow Canadian wheat to enter that country duty free,” Peterson and Tracy said in the statement.

“The agreement gives a major wheat-producing competitor an immediate price advantage in a market where U.S. wheat exports had earned a dominant market share,” the statement said. The Canadian-Columbian pact could cost U.S. wheat producers $70 million “at a time when they can least afford it. In fact, U.S. farm families now face losing a substantial portion of agricultural exports to Colombia worth nearly $1.7 billion, including $330 million in wheat exports, in 2008. Even more disturbing is the fact that our farmers should never have faced this dilemma.”

Peterson and Tracy said the U.S. government dragged its feet and failed to ratify a bilateral FTA negotiated with Colombia in 2006. That agreement would allow most American agricultural exports to enter Colombia duty free. “Canada has moved ahead with its own trade agenda.”

They expressed frustration at the delays.

“For four years, U.S. Wheat Associates (USW), the National Association of Wheat Growers (NAWG), and many other agricultural organizations have strongly advocated for this agreement. In that time, USW brought influential Colombian millers to the United States who told government officials that if they had to pay duties on U.S. wheat and not on Canadian wheat, U.S. sales and market share would fall dramatically. USW also released a report on the impact of FTAs that showed U.S. wheat exports would be 20 million bushels greater and the farm price would be 10 cents per bushel higher under a ratified U.S.-Colombia FTA. The outcome of this situation should come as no surprise.

“As an industry dependent on exports for half its sales, export opportunities and free trade are essential. We were encouraged to hear President Obama’s plans to give trade a more prominent role in his administration’s economic recovery agenda and his goal to double exports in five years. We were particularly pleased that the President recognized that U.S. inertia on trade only allows other nations to fill the void while we lose the chance to create jobs on our shores.”

Tracy and Peterson said the industry has “urged the administration to commit to this initiative by submitting the U.S.-Colombia FTA, and pending agreements with South Korea and Panama, to Congress for consideration.

“Recently, we have seen positive steps on trade. President Obama has now pledged to send the Korea-U.S. FTA to Congress by the November G-20 meeting in Seoul. Last week, the House Agriculture Committee passed H.R. 4645, the Travel Restriction Reform and Export Enhancement Act.”

That Act, if signed into law would clarify how U.S. farmers and agricultural businesses conduct sales to Cuba. It also would eliminate travel restrictions, which together have significantly constrained wheat growers' market share.

“Such steps are encouraging, but do not carry us far enough,” the statement said. “Today, 126 trade agreements are being negotiated that exclude the United States, yet each involves current U.S. trading partners. If the likely fallout from the Canada-Colombia FTA is any indication, such agreements represent a grave threat to our economic recovery.

“We urge the Administration and Congress to resolve any remaining issues with our Colombia and Panama FTAs and move the agreements forward to approval as soon as possible.”

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