FINALIZED FREE TRADE AGREEMENTS
On October 12, Congress passed the Colombia, Korea, and Panama Free Trade Agreements. President Obama signed them into law on October 21.
Collectively, these three agreements signal an understanding by Congress that increased exports mean jobs and economic activity that the U.S. desperately needs.
Under the agreements, Illinois corn farmers will enjoy:
- Higher prices for commodities as a result of higher demand for processed products and meats to satisfy export demand for the Korean market (Iowa State University).
- Immediate duty-free access to Colombian markets for corn through a 2.1 million metric ton tariff rate quota with 5 percent annual growth. This will reverse the nearly 2 million metric ton market the U.S. lost to competitors in previous years without the agreement.
- Rejuvenated trade with Panama whose agricultural exports enter the U.S. market duty-free. Prior to the agreement, less than 40 percent of U.S. agricultural exports enjoyed duty-free access to the Panamanian market.
Colombian Grain Imports:
US exports to Colombia continue to suffer despite the passage of the Free Trade Agreement with Colombia. This is a direct result of the drought in the US and high grain prices. Below are the most recent import numbers.
Despite these discouraging numbers, the long-term outlook for US exports to Colombia are rosy. Duties barriers have been removed and as soon as the US corn crop recovers from this year’s drought we can expect US market share in Colombia to begin growing at the expense of its competitors. However the importance of marketing programs to reassure importers about the quality of the US corn crop cannot be over emphasized.
Panamaian Grain Imports:
The following presentation offers some interesting information about the Panama Canal Expansion.
To learn more check out these articles:
GOVT FURLOUGH EXAGERATES TRADE DISRUPTION - October 4, 2013
CORN EXPORTS TO COLOMBIA UNDER FTA LACKING - January 17, 2013
U.S. PANAMA FREE TRADE AGREMENT EFFECTIVE OCT 31 - October 30, 2012