Pork producers aren’t the only ones who have their eyes focused on Congress’ action on free-trade agreements.

Of course, beef producers are anxiously awaiting the outcome, but so are crop growers.

While the three FTAs—South Korea, Colombia and Panama generally appeal to all of U.S. agriculture, some are more lucrative to specific sectors. Pork producer of course are most interested in South Korea, as that country could quickly move into the top three markets for U.S. pork, and over the long haul would dramatically expand export sales. Estimates are that by 2016, U.S. pork exports to South Korea would double to more than $400 million.

The corn growers are most focused on the U.S./Colombia FTA. “It would ensure that U.S. farmers compete on a level playing field against foreign suppliers set to make significant headway into the country's feed market,” say National Corn Growers Association officials.

Traditionally a Top 10 export market for U.S. corn, Colombia’s U.S. corn imports have eroded substantially over the past four years and stand to further decline in light of new trade agreements recently implemented with alternate suppliers.

Specifically, Canadian feed-wheat farmers now enjoy an advantage as their country's FTA with Colombia was implemented as of Aug. 15. In just 10 short days after the agreement took effect, Colombian buyers placed orders for more than 77.1 million bushels of Canadian feed wheat.

As U.S. Grains Council Latin America Regional Director Kurt Shultz, points out, U.S. farmers face stiff competition in Colombia as U.S. corn imports now face a 15 percent duty while Canadian feed wheat can be imported duty-free. Notably, Brazilian and Argentine corn enter the market with a 6.7 percent duty.

This differential has been clearly reflected in the decline of U.S. corn exports to Colombia, according to NCGA. In 2007, Colombia imported 118.1 million bushels of corn, of which the United States captured a 93 percent market share. In 2010, however, U.S. market share dropped to just 20 percent, representing a $475 million dollar loss to the U.S. economy.

"U.S. corn producers stand ready to develop and provide corn products to meet the modern demands of global consumption," says Garry Niemeyer, NCGA first vice president.

Under the Colombia FTA, the United States would have immediate access to Colombia's market for 82.7 million bushels of corn with no duty. There would be a 12-year phase out period for corn's 25 percent over-quota base tariff, which would decline 2 percent annually. At the same time, the tariff-rate quota volume would increase by 5 percent, compounded annually. The growth would equal approximately 133.8 million bushel tariff rate quota the year before the over-quota tariff is completely eliminated for corn, NCGA notes.

USDA estimates that approval of the three pending FTAs would boost total U.S. agricultural exports $1.9 billion for South Korea, $371 million for Colombia and $46 million for Panama. Based on estimates that every $1 billion in U.S. exports supports 8,400 jobs, nearly 20,000 jobs would be associated with the three FTAs.

"I urge Congress to work swiftly to pass the pending free-trade agreements with Colombia, as well as those with (South) Korea and Panama," Niemeyer says.

Prior to Congress’ August recess, consensus was building that the FTAs would finally get approved this month. With avenues to stimulate jobs gaining increased attention, especially with President Obama’s speech on Thursday, the pressure is on and hope is building that the FTAs will finally and officially pass.   

 

Source: NCGA