In a huge victory for U.S. wheat farmers, the United States and Colombia officially implemented on Tuesday a free trade agreement (FTA) first signed in 2006.
The pact immediately eliminates all tariffs on U.S. wheat imports to Colombia and ends a significant tariff disadvantage U.S. farmers have faced compared to Canadian and Argentine wheat imports there.
“This is a very good day for wheat farmers,” said Randy Suess, a wheat farmer from Colfax, Wash., and chairman of U.S. Wheat Associates (USW). “The tariff situation has basically forced our largest customer, historically, in South America to buy more wheat from Canada and Argentina. Now our customers in Colombia will not have to pay the tariff, and we can compete equally on the basis of quality, supply and service.”
Implementing this FTA is particularly important to U.S. wheat farmers, who rely on exports to market about half of their crops each year. In marketing year 2010/2011, Colombia imported from Gulf and Pacific Northwest tributaries about 800,000 metric tons of U.S. wheat from five of six classes. However, U.S. wheat sales for this marketing year are down about 45 percent year on year, mainly due to the Canada-Colombia FTA that went into effect on Aug. 15, 2011. Wheat imported from Argentina has also enjoyed duty-free status under the South American Mercosur trade agreement.
“A lot of people have joined us in working hard to get the U.S.-Colombia agreement approved by Congress, signed by the President and now implemented,” said Erik Younggren, a wheat farmer from Hallock, Minn., and president of the National Association of Wheat Growers (NAWG). “While the process of removing our trade barriers with Colombia has been a long one, we are eager to get this market back on track.”
The U.S. wheat industry believes this agreement, along with the recently implemented FTA with South Korea and a pending FTA with Panama, will help the United States rebuild and expand markets, grow our economy at home and maintain the status of the United States as the most reliable supplier of wheat in the world.
The industry appreciates the hard work and support of Colombian flour millers and government officials throughout the process, as well as the efforts of trade supporters in Congress and the Bush and Obama Administrations.