03/04/2006

Cattle Producers Await Details of Colombian Free Trade Agreement
report from R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America)

(Billings, Mont.) – The U.S. Trade Representative (USTR) announced this week that work on a free trade agreement (FTA) between the United States and Colombia had concluded, but legal experts in Colombia still have up to three months to review the document before foreign policy committees in both houses of Colombia’s Congress send it to the whole body for a vote. The U.S. Congress has 90 days to review the FTA before USTR can sign it and then submit the agreement to Congress for a vote. This FTA is part of an overall USTR effort to create an Andean FTA, which also would include the countries of Peru, Ecuador and possibly Bolivia.

In 2005, Colombia and the United States had a $14.3 billion in two-way trade, and Colombia is currently the second largest agricultural market for the U.S. in Latin America, according to USTR, although the leading categories are in coarse grains, wheat, cotton and soybeans.

“USTR has said that high quality and processed U.S. beef will receive immediate duty-free treatment, and that both countries resolved sanitary and phytosanitary (SPS) barriers on food-safety inspection procedures for beef – provided Colombia lifts its BSE (bovine spongiform encephalopathy) restriction,” said R-CALF USA International Trade Committee Chair Doug Zalesky. “However, because R-CALF worked so closely with USTR to request that certain safeguards for U.S. cattle and beef be included in this FTA, we’re now awaiting the opportunity to review the full details of the agreement to determine whether it contains adequate safeguards for the U.S. cattle industry.

“When USTR says ‘high quality’ U.S. beef can immediately be exported, we’re hoping that it’s not simply the high-end beef products designed to service the tourism industry,” explained Zalesky. “Colombia’s per capita income in 2003 was only $1,800, so R-CALF would like to see market access for all grades of U.S. beef so we can reach all types of consumers there.

“We also hope that U.S. negotiators incorporated special rules on perishable, seasonal and cyclical agricultural products – specifically cattle and beef, and safeguards against import surges or falling prices,” Zalesky continued. “It’s also important that trade-distorting subsidies for Colombian cattle producers be eliminated, subsidies that may partially be responsible for the extraordinary growth in Colombia’s cattle herd size since 2001, and could result in a dramatic increase of Colombian beef exports to the United States.

“R-CALF also requested stronger rules of origin in this FTA because of the potential for transshipment of cattle and beef from nations like Argentina and Brazil,” he noted. “We asked for a ‘born, raised and slaughtered’ (BRS) standard so that in order to receive trade benefits, a Colombian producer would have to demonstrate that the cattle or beef being exported was truly born and raised there, not animals or beef from outside countries where potential problems with disease, medication residues, facility cleanliness and such might occur.

“For example, under the North American Free Trade Agreement (NAFTA), cattle originating from South American were allowed to enter Mexico for slaughter and export to the U.S, which hurt NAFTA’s intended beneficiaries, particularly cattle producers in the United States,” commented Zalesky. “Import certification that allows for source verification, and verification of compliance with a BRS rule of origin are a couple of measure that must be included in the Colombian FTA so our domestic industry isn’t undermined.

“Also of concern is the presence of foot-and-mouth disease in that region, and R-CALF wants to make certain that U.S. import restrictions applicable to FMD-affected countries not be subject to revision through this FTA,” he said.

“With each of these elements in place, potential harm to our domestic cattle industry can be minimized, and if Colombia reciprocates those benefits to the U.S., we can avoid the perverse result of increasing access for third-country producers who provide no meaningful access to the U.S. cattle industry,” Zalesky concluded. “These steps will also help build support in the domestic cattle industry for fair and balanced trade, and help safeguard the livelihoods of thousands of independent U.S. cattle producers.”

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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) represents thousands of U.S. cattle producers on domestic and international trade and marketing issues. R-CALF USA, a national, non-profit organization, is dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA’s membership consists primarily of cow/calf operators, cattle backgrounders, and feedlot owners. Its members – over 18,000 strong – are located in 47 states, and the organization has over 60 local and state association affiliates, from both cattle and farm organizations. Various main street businesses are associate members of R-CALF USA. For more information, visit www.r-calfusa.com or, call 406-252-2516.