Grower groups applaud Obama Administration for sending FTAs

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The National Corn Growers Association, American Soybean Association, National Association of Wheat Growers & U.S. Wheat Associates applauded President Obama yesterday for sending the pending Free Trade Agreements (FTAs) with Korea, Colombia and Panama to Congress for consideration.

“NCGA strongly supports the pending FTAs with Korea, Colombia and Panama, and we are pleased to see President Obama understands the importance of expanding trade,” NCGA President Garry Niemeyer said.  “The United States is the largest producer and exporter of corn in the world, exporting over 50 million metric tons of corn worldwide in the 2009-10 marketing year.  These pacts represent significant markets for our nation’s corn and corn co-products as well as opportunities for our customers in the livestock industry.”

Korea is the United States’ third largest corn market and potentially an important market for distillers’ grains.  Colombia has traditionally been one of the top 10 export markets, but is currently importing corn from U.S. competitors because of an import duty preference. Panama is one of the fastest-growing economies in Latin America.  Corn exports there have dropped 20 percent from their 2008 peak.

ASA now calls on Congress to swiftly pass the FTAs so they may enter into force as soon as possible.

“NCGA remains committed to the development and maintenance of free and open trade policies and we ask Congress to move swiftly on passage,” Niemeyer said.  “As we await Congress’ action, our farmers continue to watch other nations receive preferential access to markets and receive a competitive edge.”

The U.S. wheat industry strongly supports these bilateral agreements as critical steps toward competing on a level playing field in the global wheat market, and now urges Congress to pass them as quickly as possible. The Colombia agreement, in particular, is vital to the wheat industry’s efforts to maintain market share in what has traditionally been the largest market for U.S. wheat in South America.

The trade agreements combined represent nearly $3 billion of additional agriculture exports to these trading partners. Soybean farmers look forward to increased exports of soybeans and soy products, and domestically produced livestock and poultry that consume soy.

“But these export gains can only be realized by passage and implementation of the three trade agreements. After nearly a five-year delay, we have experienced firsthand the loss of U.S. market share to competitors in those markets, said ASA President Alan Kemper, a soybean producer from Lafayette, Ind. “We urge Congress and the White House to work together to take full advantage of the economic boost that these FTAs provide the American economy,” Kemper said.

Under trade agreements with Canada and Argentina, wheat from these origins enters Colombia duty free while U.S. wheat faces a 10 percent tariff. Colombian buyers want to import U.S. wheat, but they do not want to pay the extra cost associated with the tariff. U.S. wheat sales to Colombia have dropped 20 percent since June alone, a rate of loss that is likely to grow now that an FTA between Canada and Colombia is in place. In fact, USW estimates that U.S. wheat growers could lose at least $100 million in sales in this competitive market every year.

“We know there is strong support for these trade agreements on both sides of the aisle and in both Congressional chambers,” said Wayne Hurst, NAWG president and a wheat farmer from Burley, Idaho. “We want Members to work day and night until these agreements are done and duty free access is in place for our growers and exporters.”

“Our industry is uniquely trade-dependent, with about half of our production moving to export markets each year,” said Randy Suess, USW chairman and a wheat farmer from Colfax, Wash. “Not long ago we supplied 70 percent of Colombia’s wheat imports so we know we can compete there. It is very frustrating that the delay in ratifying this agreement that was signed in 2006 is now costing us sales every day.”

Sources: NCGA, ASA & NAWG

 

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