The National Cattlemen’s Beef Association (NCBA) supports swift passage of the U.S.-Colombia Trade Promotion Agreement, as urged this week in President Bush’s correspondence with Congress. As noted by the White House, this trade agreement has significant economic, political, and national security implications for the United States and for all nations in the Andean region. But cattle producers are also anxious to correct the serious inequities that exist between U.S. exports to the region and goods that our nation imports from Colombia.
While 90 percent of Colombian products currently shipped to the United States are free from tariffs, most U.S. exports face significant tariffs and other restrictions when entering Colombia. This is due in part to the Andean Trade Preference and Drug Eradication Act, which Congress recently extended by an overwhelming margin.
“The United States has taken these steps to help lift the economy of some key Latin American allies, and we understand the need for that,” says NCBA President Andy Groseta, a rancher from Cottonwood, Ariz. “But America’s farmers and ranchers find it very hard to compete in a global economy when imports enter the United States duty-free, while our outbound products face significant tariffs and trade barriers.”
In 2006, Colombia agreed to open its market to all U.S. beef and beef products. While this policy is much-appreciated by U.S. cattlemen, the U.S.-Colombia TPA is still needed in order to make U.S. beef available and affordable to residents of this region. Presently, U.S. beef faces an 80 percent tariff upon entry into Colombia.
“We’re making progress with nearly all of our trading partners in terms of getting their markets reopened to U.S. beef,” Groseta said. “But in order to make our product competitive and affordable, we need to keep working to reduce tariffs and break down trade barriers. How do we even know what a market's potential could be, when our beef is faced with these outrageously high tariffs?”
The U.S.-Colombia TPA is one of the best-negotiated free trade agreements for U.S. beef to date, eliminating tariffs immediately on high-quality beef, and eventually reducing tariffs on all other beef products. Prime and choice graded beef will receive immediate duty-free, quota-free access upon implementation of the agreement. Tariffs on all remaining beef products will be eliminated within 15 years.
Cattlemen view the agreement as having a very positive impact on the nation’s agricultural balance of trade, as Colombia is already an important market for America’s farmers and ranchers. In 2006, the United States exported roughly $868 million in agricultural products to Colombia. Once implemented, the U.S.-Colombia TPA could provide as much as $690 million in gains each year for American agriculture.
Conversely, the United States has historically imported only a very minimal amount of pre-cooked beef products from Colombia -- the most being $16,000 worth in 2006. Colombia is not eligible to export live cattle or fresh beef to the United States due to the presence of foot-and-mouth disease. That status will not be changed by passage of the U.S.-Colombia TPA.
“It’s time for Congress to move forward on this agreement,” Groseta said. “It’s a great opportunity to expand this market for beef and other American agricultural products.”