As the U.S. Congress waits to vote on free trade agreements with South Korea, Panama and Colombia, South Korea's FTA with the European Union went into effect July 1 and Colombia's FTA with Canada will take effect Aug. 15. U.S. Grains Council Director of Trade Policy Floyd Gaibler says a delayed vote would be unfortunate. Gaibler says the lack of these agreements diminishes the nation's ability to be competitive and threatens further erosion in U.S. corn exports to Colombia.
But Congress may not wait very long, prior to the August recess, Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., announced that they had reached agreement on moving the pending trade deals forward. Gaibler hopes all three FTAs will be approved by Congress sometime in September. As the political and economic pressure to create more jobs becomes more apparent, he say he believes Congress and the President will come to an agreement on a trade jobs program that has held up the FTA votes.
Secretary of Agriculture Tom Vilsack says the Administration is excited about getting these free trade agreements approved as soon as possible and begin benefitting from the $1.9 billion of additional agriculture opportunity in Korea and the several hundred million dollars represented by Colombia and Panama.
For U.S. corn farmers, Gaibler says failure to approve the Colombia agreement has been especially costly. Colombia was the sixth-largest U.S. corn market and was growing until 2009, when Colombia's trade agreement with South America's Mercosur nations reduced tariffs on Argentina and Brazil to 6.9%, a level that will continue to decline until it reaches zero in 2018. If Congress fails to pass the Colombia FTA, Gaibler says U.S. corn will continue to face a 15% tariff.