Friday, January 28, 2011

Columbia Free Trade Agreement Vital to U.S. Wheat Growers

Columbia Ambassador Gabriel Silva, a guest presenter at the U.S. Wheat Associates winter meeting, provided an overview of Columbia’s growing economy and its importance to U.S. wheat growers. Colombia has the second-largest population in South and Central America and the Caribbean, and is the third-largest economy in the region.

Colombia is an important growing market with its imports nearly tripling in the past 7 years. Agricultural products, including corn, wheat and soybeans represent about 10% of total imports. Colombia imports 97% of the wheat it consumes. Until 2009, the U.S. was the main supplier of corn, wheat, soybeans and their products in Colombia with a peak of 76% of market share in 2007. However, in 2010 U.S. market share of these products fell to 27% and for the first time, U.S. lost its place as Colombia’s main supplier.

The U.S. Colombia Free Trade Agreement is crucial to the U.S. wheat industry to maintain sales and market share in an increasingly competitive trade environment. In 2009/10, Columbia was the eighth largest market in the world for sales of U.S. wheat. A fully implemented free trade agreement will immediately eliminate the country’s price ban system and remove tariffs on U.S. wheat imports upon implementation. This would level the playing field, ensuring U.S. products can compete in the Columbian Market.

U.S. wheat producers face an increasingly competitive and uncertain market in Colombia despite long-standing ties with Colombian millers, the U.S. wheat industry will continue to lose market share to Canada, Argentina and possibly the EU under implemented FTAs. Based on direct input from Colombia’s milling industry, at current prices, U.S. wheat producers across the country stand to lose up to $100 million in wheat sales every year if we must compete without a ratified FTA.

The U.S. wheat industry, along with other agricultural commodity groups, supports immediate ratification of the U.S./Colombia free trade agreement so U.S. producers can compete fairly in the Colombian market. Without the U.S./Colombia FTA, U.S. wheat growers and producers will face an uphill battle in this hard-fought and critical export market resulting in millions of dollars in losses of both exports and jobs.

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