The U.S. government recently took one more step in a long journey toward implementing pending free trade agreements (FTA) with Colombia, Panama and South Korea The U.S. wheat industry is pleased to see this progress, in no small part because we believe trade agreements work for the U.S. economy and for our trading partners.
In the last three months, EU-Korea and Canada-Colombia FTAs entered into force and have unnecessarily disrupted trade with U.S. businesses just as an economic lift is sorely needed. So if sitting on the sidelines has produced nothing else, at least it has helped reveal proof that trade agreements work.
In the first two weeks under the EU-Korea agreement, trade between the two partners increased 17.4%. Canadian wheat exports to Colombia for the entire month of August more than doubled vs. the previous year, while U.S. exports fell by more than 50% year on year for the same time.
Overall, Colombia has imported roughly 20% less U.S. wheat this marketing year (June-July-August) compared to last year at the same time, with losses occurring mainly in the hard red spring (HRS) wheat class that is similar in quality to Canada’s major wheat class, Canadian western red spring (CWRS).
We realize many factors come into play when making buying decisions, but the numbers above clearly illustrate the simple fact that trade agreements provide opportunities resulting in winners and losers. Trade agreements help create a successful marriage of each country's competitive advantages that far exceed a one-to-one return and trade creates benefits for the global community, 95% of which live outside U.S. borders and in countries with growing economies.
Clearly, trade agreements are working to lift economic opportunity for other countries. We hope the same opportunity will finally come soon to U.S. wheat farmers and their customers in Colombia, Panama, South Korea and other countries around the world.