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Latin America big market for U.S. grains

Latin America big market for U.S. grains

• President Obama’s words refocus attention on a critical and long-standing North-South partnership, one engendered by geographical proximity, cultural ties, and interdependent economies.

In his recent speech from the Presidential Palace in Santiago, Chile, President Obama reminded us that the United States exports “more than three times” as much to Latin America as China, and our exports to the region are growing faster than to any other part of the world.

The President’s words refocus attention on a critical and long-standing North-South partnership, one engendered by geographical proximity, cultural ties, and interdependent economies. As President Obama noted, “when Latin America is more prosperous, the United States is more prosperous.”

Several of the U.S. grain industry’s top export markets are in Latin America, along with several of the industry’s fastest growing markets and several trade allies, whose own policies directly impact the U.S. grain and ethanol industries. The U.S. grain industry is encouraged and excited by phenomenal market share growth in Peru from barely 10 percent two years ago to more than 35 percent, a market that could exceed $300 million in sales in the next few years as U.S. market share eclipses competitors.

New grain exports to Peru create new opportunities in the United States. Agriculture Secretary Tom Vilsack noted in a recent speech that “farm exports alone will support more than 1.1 million jobs in 2011. “Brazil, now the seventh largest economy in the world, is also an economic powerhouse with agricultural abundance distinguished as one of the few countries with generous stores of available land for agricultural production. The U.S. and Brazil’s agricultural economies are intrinsically linked and our respective policy decisions will undoubtedly have mutual impact. It is critical that the U.S. grain industry cultivate this trade relationship as one of partnership, as President Obama noted, “I believe that in the Americas today, there are no senior partners and there are no junior partners, there are only equal partners.”

Cultivated partnership for years

The U.S. Grains Council believes in this partnership and has cultivated it for many years through offices in the Americas and by working with USDA to offer training, technical assistance and capacity building throughout the region. While the Council is encouraged by the President’s commitment in the Americas, it remains incomplete.

Trade should not be held captive to politics. In an open market system, trade responds to need and competitive advantage. As Venezuela remains a top export destination for U.S. grains, grain market share in Colombia is now less than 25 percent from a high of almost 90 percent in 2008, a loss of almost $500 million in sales and countless jobs. Colombia already enjoys duty-free access for its exports to the United States and a true partnership would put the United States on equal trade terms with Colombia. From the steps of Chile’s Presidential Palace, the President committed to getting both the Colombia and Panama free trade agreements completed and to continue to engage in a constructive dialogue with leadership on changing the U.S./Cuban political status quo.

These initiatives will help restore the competitive advantage and true partnership in the Americas, both of which have suffered from years of political infighting in the United States. The Council applauds President Obama’s commitment to these critical components of the U.S./Latin America partnership. The Council looks forward to definitive action in the near future, and to strengthening ties with our Latin American partners.

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