- Farm and commodity groups react positively to Congress receiving Free Trade Agreements.
- Deals lined up with Colombia, Panama and South Korea.
Agriculture advocates and commodity groups reacted quickly following the White House’s submission of three Free Trade Agreements to Congress on Monday. If passed, government officials say, the deals – with Colombia, Panama and South Korea - will mean a substantial increase in the export of U.S. agriculture products.
“When they’re approved, these agreements will clear the way for new American exports around the world,” said Agriculture Secretary Tom Vilsack on Tuesday morning. “(This will) create jobs and provide new income opportunities for (U.S.) agricultural producers, the small businesses that will assist in the export of those agricultural products, and rural communities from whence they come.
“American agriculture will benefit to the extent of $2.3 billion in additional exports. That will support nearly 20,000 jobs” in the United States.
Among those happy with the FTA news are:
- The National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW).
“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,” reads a joint statement. “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.
“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.”
- The National Cotton Council.
“National Cotton Council members consistently have expressed support for Congressional approval of the Free Trade Agreement with the Republic of Colombia, which was signed in November 2006,” says an NCC statement. “The U.S. cotton industry has increased exports of cotton and cotton products under the provisions of the Andean Trade Preference and Drug Eradication Act (ATPDEA). However, approval of the FTA will enhance U.S. competitiveness and benefit farmers and manufacturers by removing the tariffs which are currently applied to U.S. products entering Colombia.
“Colombia is an important export market for U.S. raw cotton. In 2010, the United States exported more than 230,000 bales of raw cotton to Colombia with an estimated value of $100 million. With an 80 percent market share, the United States is the primary supplier of imported cotton to the Colombian market. With the FTA in place, the United States is well positioned to capture a significant portion of growth in Colombia’s demand for cotton fiber.
“In addition, both Colombia and the United States benefit from significant two-way trade in cotton textile products. In 2010, textile exports in predominantly-cotton products from the United States to Colombia totaled $56 million. During that same year, the United States imported $165 million in predominantly-cotton textile products from Colombia. Under the provisions of the ATPDEA, Colombian apparel products, containing U.S. components, enter the United States duty-free. However, the failure to approve the FTA in a timely manner and the uncertainty associated with the need to extend the ATPDEA while the Administration and Congress consider the FTA, has disrupted trade and caused U.S. exporters of cotton yarn and fabric to lose business to Asian sources.”
- The American Farm Bureau Federation.
“America’s farmers and ranchers have much at stake and the fact these three agreements are moving forward is very good news for our economy,” reads an AFBF statement.
“Now that the (Obama) administration has done its part, it’s up to Congress to expedite this matter. It is vital that this process move forward to ensure the agreements will be put in place as soon as possible so we can restore a level playing field for U.S. exports to these three nations. Without these agreements, over the last four years, Korea, Colombia and Panama have opened their doors to our competitors. A further delay will provide more benefits to our competitors at the expense of our economy.
“Combined, the three FTAs represent nearly $2.5 billion in new agriculture exports and would create the economic growth that could generate support for up to 22,500 U.S. jobs. These gains will only be realized if the three agreements are passed by Congress and implemented.”
- The American Soybean Association.
“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.’"
- The National Sorghum Producers.
“We are extremely pleased to see President Obama send these long-standing free trade agreements to Congress for approval,” said NSP Chairman Terry Swanson of Walsh, Colo. “Currently, 40 percent of all U.S. sorghum enters the export market. Passage of these agreements will create market access and open the door to new opportunities for U.S. sorghum producers.
“The passage of these agreements is expected to generate more than $2 billion annually to U.S. farm exports and support nearly 20,000 American jobs, which is a promising benefit to farmers and ranchers and the U.S. economy.”
- Iowa Corn Growers Association.
“’As we wait for Congress to act, U.S. corn farmers are losing important market share in other countries,” said Kevin Ross, a farmer from Minden, Iowa and the current President of the Iowa Corn Growers Association. ‘The pending free trade agreements with Korea, Colombia, and Panama represent important export market opportunities and with our current economy, this is crucial to our competitive edge.’
“Korea is currently the third largest corn market and has the potential to be an important market for ethanol co-products, dried distillers grains. Colombia has traditionally been one of our top 10 export markets, but is currently importing corn from U.S. competitors because of the current import duty preference. Panama is one of the fastest-growing economies in Latin America with corn exports peaking in 2008 and dropping more than 20 percent since that time.”
There is at least one notable opponent of the FTAs.
Roger Johnson, President of the National Farmers Union, said the pending FTAs are akin to “the North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA). Both of those agreements have worsened the U.S. trade deficit, because the U.S. does not compete on a level playing field with other nations. America adheres to higher labor and environmental standards than other nations, so U.S. companies incur costs that companies in other nations do not.
“Labor and environmental standards, currency manipulation, and food security are protections that are absolutely essential in any trade agreement to ensure that a nation is able to protect itself and compete on a level playing field. In particular, South Korea has manipulated its currency twice in the past. Mexico devalued the peso shortly after the signing of NAFTA, wiping out all trade gains that the U.S. would have gotten otherwise. History is very likely to repeat itself without currency manipulation protections.
“Colombia has one of the worst labor records in the world, routinely committing violence against those who attempt to organize workers. In 2010, 51 union members were killed in Colombia. We should not reward the Colombian labor record by entering into a trade agreement with them.
“Agriculture has been one of the few sectors of the U.S. trade economy that consistently has a trade surplus. Since 1990, agriculture has had a positive trade balance every year. With countries that the U.S. has a trade agreement with, U.S. agriculture has a net trade deficit in seven of the past eight years.”