Monday, October 2, 2023

Should the United States FTA be reviewed? Opinions on the agricultural sector are divided

On August 17, in the middle of a meeting of the coffee growing sector in Pitalito, Huila, President Gustavo Petro announced that he will renegotiate the Free Trade Agreement, FTA, with the United States. However, a day after the statements, the Minister of Commerce, Industry and Tourism, Germán Umaña, clarified that a request was not made to renegotiate the FTA, but that they are in the process of review, a different process than what President Petro.

The review of the FTA with the United States has different views from the agricultural sector. For example, livestock farmers are talking about the need to facilitate the entry of that market with meat, while grain producers are looking for a tariff classification for corn imported from that country. Other unions, such as Fedecacao, assure that it is beneficial for the exports of the sector and Fenavi is on its way to send Colombian chicken to the United States.

“There is little room for maneuver for the review of a trade agreement, such as the phytosanitary admissibility protocols of interest from Colombia to the United States. There are several processes that that country has significantly delayed, which has meant that not all products can enter because they have not been approved, those types of things can be reviewed,” explained Jeffrey Fajardo, executive president of Porkcolombia.

Fajardo explained that the pork sector is an emblematic case, because, as a result of the entry into force of the agreement, it was exempted from taxes for five years, between 2012 and 2017.

“Pig farming is the sector that faces the fastest competition in the United States. The sector experiences what is called negative effective protection, which means that the inputs and raw materials for industrial production taken later than the product. end, which is pork, so Meat is imported at 0%, while tariffs are still paid for the country,” he said.

Óscar Cubillos, head of the office of planning and economic activities of Fedegan, assured that in the two main value chains of the livestock sector there is a trade balance deficit compared to the trade with the US. In the case of milk and derivatives, it is US $124 million; while in meat, US$ 45 million.

“In that sense, what has been requested on different occasions from the US is to facilitate the entry of Colombian beef into this market, knowing that Colombia is carrying out a plan of activities necessary for entering this destination. There will then come the opportunity to review the FTA, because it is clear that the trade in meat and milk is unbalanced and unfair,” he said.

Henry Vanegas, general manager of Fenalce, explained that, using the principle of equality, this compensatory measure should be extended to the local corn producer (without touching the tariff).

“Giving a tariff classification to the corn imported from the US is important. What has not been done from a technical point of view is the correlation of the tariff between the two countries. Dent corn is more suitable for feeding animals, while flint corn (with hard, crystalline endosperm), which we produce in Colombia, is preferred for human consumption,” he explained.

Other points are the adaptation or harmonization of the sanitary and phytosanitary quality parameters of corn for animal and human consumption; and will accept imported yellow corn grade two only, without receiving low quality, which will directly affect the market price in the local market and will be unfair competition.

“The Board of Directors must agree that from now on imports will be managed in certain windows so that imports do not arrive during the national harvest and marketing areas are not reduced for local corn producer,” Vanegas explained.

Gonzalo Moreno, executive president of Fenavi, said that, in order to carry out a renegotiation of the FTA, as Petro said in principle, an agreement between the two countries is needed. “We don’t think it’s appropriate. We must take advantage of the FTA in the case of the poultry sector, with the health admissibility of Colombian chickens to the United States,” he stated.

Eduard Baquero, executive president of Fedecacao, said that the FTA with the US has been beneficial for exports, “considering that cocoa beans, cocoa butter and cocoa paste have free access to the US market and, “For on certain food preparations containing cocoa, such as low-fat chocolates, the FTA agreed to a 15-year tariff reduction.”

The leader of the union added that “any action that restricts, makes more expensive or makes access to the US market, raw materials or cocoa-based products from Colombia, directly affects the cocoa farmers and put in risk of buying a guarantee that he now enjoys.”

How would some agricultural products be without the FTA with the United States?

María Claudia Lacouture, president of the Colombian-American Chamber of Commerce, AmCham, said that, without the FTA, Colombian coffee in the United States would have a tariff between 10% and 20%; flower 5%, avocado 5% and tilapia 20%. Other effects pointed out by the spokesperson are inflationary pressure, because products such as corn are imported with 0% tariff and will make other products such as eggs, poultry and pork more expensive, which are subsectors which uses the concentrate to feed animals.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news