Ways and Means Chairman Dave Camp (R-MI) and Trade Subcommittee Chairman Kevin Brady (R-TX) issued the following statements today after Canada and Colombia announced that the trade agreement between those two countries has entered into force today, putting American workers and exporters at a disadvantage as they seek to export American goods and services to Colombia.
Chairman Camp stated: “Today’s entry into force of the trade agreement between Canada and Colombia means that – for no good reason – U.S. workers and exporters are now disadvantaged in Colombia, a key export market for American-made goods and services. Our trade agreement with Colombia was signed in 2006, years before Canada and Colombia even began their negotiations. In the meantime, our share of Colombia’s imports of key grains fell, and the trend will only accelerate as Canada and other countries deepen their trade ties with Colombia. Once again, I urgently call on the President to send the job-creating trade agreements with Colombia, Panama and South Korea to Congress without further delay.”
Trade Subcommittee Chairman Brady commented: “Our pending trade agreements will create U.S. jobs. Because of inexcusable delay in Washington by those who fail to understand this fundamental fact, American workers and exporters now face the prospect of falling even further behind. Already, Colombia’s largest cookie and cracker company, which accounts for over half of Colombia’s wheat imports, has announced it will switch its U.S. wheat orders to Canadian wheat. We must get back in the game immediately by passing all three of our trade agreements before we lose any more jobs. We stand ready to do so as soon as the President submits them to Congress.”
- As of August 15, Canadian wheat and wheat flour exports enter Colombia duty-free. In contrast, U.S. farmers’ wheat and wheat flour exports to Colombia must pay a thirteen percent tariff. The U.S.-Colombia trade agreement would eliminate that duty immediately upon entry into force. U.S. Wheat Associates, an association of wheat growers, estimates that the United States could lose $100 million in wheat sales each year as a result of our tariff disadvantage
- The President of Nutresa, Colombia’s largest manufacturer of food products, announced in April that it would begin sourcing Canadian wheat in place of U.S. wheat because of the tariff reductions under the Canada-Colombia trade agreement. Nutresa accounts for over 50 percent of Colombia’s wheat imports.
- U.S. exporters in many other sectors will now also be at a disadvantage in competing with Canada for a share of Colombia’s import market. For example, the United States is now the largest exporter of paper and forest products to Colombia. Canada is second. Its exporters will now have duty-free treatment, but U.S. exporters must continue to pay fifteen percent duties on many paper product exports. U.S. exporters of motors, engines, chemicals, fertilizers, and other products are at a similar disadvantage because those are sectors in which Canada is a strong competitor.
- U.S. exporters are also losing out to other countries that have trade agreements with Colombia. In 2008, the United States provided 71 percent of Colombia’s imports of wheat, corn, and soybeans. Our Colombian exports of those grains had been growing nearly 40 percent annually for five years. But then Colombia’s trade agreement with Argentina and other MERCOSUR countries lowered agricultural tariffs in January 2009 for products from those countries – and their market share soared while U.S. market share dropped from 71 percent to 27 percent in just two years.
- In the past two years, U.S. farmers and ranchers have lost more than $1 billion in sales to Colombia.