NCGA says now is the time for Congress to pass pending FTAs


On Thursday, the Senate Finance Committee will hold a mock mark-up of the pending free trade agreements with Korea, Colombia and Panama. This action signifies the beginning of the ratification process in Congress and NCGA wants to ensure members hear us loud and clear when we say that now is the time to pass the pending FTAs.

Use of the latest technologies both in equipment and seed has aided the United States in becoming the largest corn producer and exporter in the world. But beyond increasing domestic and international demand for corn, the FTAs would also benefit our customers in the livestock and poultry industries.

Developing new markets for our country’s agricultural products is vital to producer income and also helps our sector lead the nation in economic growth and international competitiveness. If passed, this would be the largest package of free trade agreements since Congress passed the North American Free Trade Agreement in 1993.

Last year, the United States exported 50.4 million metric tons of corn worldwide. This year, the USDA is forecasting the United States to reach a record high $135.5 billion in exports. This number represents a nearly $27 billion increase over last year and a record trade surplus of $47.5 billion. It is also estimated these exports support 1.1 million jobs across the country. However, if we allow the pending FTAs to stand idle, demand for corn will decrease significantly.

Korea, for example, is currently the United States’ third largest corn market and is a potentially important market for distillers grains. Last year, Korea imported over seven million metric tons of corn for the United States, which represented 30 percent of the country’s entire corn exports. If the free trade agreement with Korea is passed, imports of U.S. corn for feed are guaranteed to enter duty free immediately. It will also allow provide immediate access to duty-free distillers grains. Korea is a vastly growing market we cannot afford to lose to our competitors.

Colombia is traditionally one of the top 10 export markets for U.S. corn, but the country is currently importing corn from U.S. competitors including Argentina, Brazil and Paraguay because of an import duty preference. From marketing year 2007-08 through 2009-10, U.S. corn exports drastically dropped 78 million bushels, which is an estimated loss of $475 million. Under the Colombian FTA, U.S. corn producers would gain immediate access to the Colombian market for 2.1 million metric tons of corn at zero percent duty.

Panama is one of the fastest growing economies in Latin America. Corn exports from the United States to Panama peaked in 2008 and have since decreased by 20 percent. The United States is traditionally the sole supplier of corn to the Panamanian market; if we fail to capture this opportunity, our share of Panama’s market will continue to plummet.

It’s frustrating to watch other nations achieve preferential access to markets and secure a competitive edge over U.S. corn and corn co-products. Growers throughout the country stand ready to meet the growing demand for our product, but we need Congress to act now on the pending FTAs with Korea, Colombia and Panama. We need to keep jobs in America and we need to continue to increase our export opportunities before our competitors beat us to it.

By Rick Tolman, NCGA Chief Executive Officer