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Labor plan with Colombia improves FTA odds

DANIEL LOOKER 04/06/2011 @ 4:02pm Business Editor

The White House announced Wednesday that it has reached an agreement with the government of Colombia aimed at protecting the rights of labor leaders in that country, which it hopes will improve chances of Congress passing a Free Trade Agreement with Central and South America’s third biggest economy.


The announcement was welcomed by ag groups, including the National Corn Growers Association and the American Soybean Association, whose members have been losing market share in Colombia in recent years.


The Administration still hasn’t asked Congress to vote on a Free Trade Agreement with South Korea, after announcing last December that it had resolved labor issues and gotten support from the United Auto Workers and other unions. 


Senator Max Baucus (D-MT) is trying to get South Korea to agree to import beef from older animals, something the Administration hasn’t been able to achieve.


The Action Plan negotiated between the U.S. and Colombia increases protections by the Colombian government of labor leaders, who in the past have been murdered and threatened by right-wing death squads.


Although Baucus and other leaders in Congress from both parties have asked the Administration to seek a vote on three pending free trade agreements, with Panama as well as Colombia and Korea, U.S. Trade Representative Ron Kirk told reporters the White House has no plans to do so.


“We believe as the agreements are ready, Congress should consider them individually,” Kirk said. 


The Administration is now negotiating with members of Congress on the timing of a vote on the agreement with Colombia.


Once ratified, Colombia would immediately drop tariffs on soybeans and soy meal and flour, according to the Trade Representatives office. It would provide for immediate duty-free access of corn through a 2.1 million metric ton tariff rate quota that will expand by 5% a year. A tariff of 25% on corn above the quota would phase out over 12 years. A list of benefits to ag from the Colombia trade deal can be found here


According to the National Corn Growers Association, during marketing year 2007-08, the United States exported 114 million bushels of corn to Colombia, with an estimated value of nearly $627 million. U.S. corn exports declined dramatically during the 2009-10 marketing year, with only 36 million bushels exported, valued at $152 million. The decline in exports reflected a loss of $475 million to the U.S. economy.


“Colombia has traditionally been one of the Top 10 export markets for U.S. corn,” NCGA President Bart Schott said.  “This is an important market for U.S. farmers and we do not want to watch this market slip away to our largest competitors.”


ASA is also pleased that the Colombia agreement may be moving ahead.


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