Canada Prime Minister Stephen Harper announced last week that the Canada-Colombia Free-Trade Agreement is now in effect. The announcement was made jointly with the President of the Republic of Colombia, Juan Manuel Santos, during Harper’s official visit to Colombia. The FTA is expected to open access to 98% of agricultural goods and nearly full access to all other industries between the two countries.
The United States signed a FTA with Colombia in 2006 but it is currently stalled in Congress awaiting implementation. Iowa State University economist Dermot Hayes calculates that when fully implemented, the U.S. - Colombia FTA would generate an additional $68.9 million in U.S. pork exports and create 919 new jobs due to increased pork exports alone. However, should the United States fail to implement its FTA with Colombia, the U.S. will be completely out of the Colombian pork market within ten years, according to Hayes.
During the years the U.S.-Colombia trade agreement has been stalled, the benefits of the agreement -- increased U.S. exports and more American jobs -- have been lost. For the U.S. pork industry, the agreement would provide tariff phase-outs on most key pork products within 5 years, including immediate tariff elimination for bacon and pork skin, according to the National Pork Producers Council. The tariff phase-outs could have been as early as 2012, but now will not occur for at least five more years.
While the U.S.-Colombia agreement languishes in Congress, Canada has been diligent in promoting its own trade deal with Colombia. “Our Government has been hard at work opening new markets abroad for Canadian businesses, which creates jobs for Canadians,” said Prime Minister Harper. “Colombia has a burgeoning economy with incredible potential for commercial linkages with Canadian entrepreneurs. Improving trade and expanding market opportunities also helps to build a better future for the next generation.”
The Canada-Colombia FTA will help Canadian businesses improve access to an emerging market of 45.5 million people and an economy with a high growth potential. The FTA will benefit Canada’s producers and exporters, reduce or eliminate tariffs on nearly all current Canadian exports, and provide a more predictable, transparent and rules-based trading environment for Canadian investors.
"Modern rules in investments were negotiated... necessary to ensure the greatest flow of capital from Canada, a country that over 10 years has accumulated, on average, $1 billion in Colombia," according to Colombia's Economy, Industry, and Tourism Minister Diaz-Granados.
Canada and Colombia enjoy a healthy trade relationship with two-way merchandise trade in 2010 reaching $1.4 billion, an increase of 32 percent from 2005. In the Caribbean and Latin America region (excluding Mexico), Colombia is Canada’s fifth largest merchandise trading partner.
Read a commentary on U.S. FTA's by American Meat Institute President and CEO J. Patrick Boyle.
Source: NPPC, Office of Canada Prime Minister