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Andean FTA hailed by US Wheat Associates

DTN | 4 November 2004

Andean FTA Hailed By USWA

An Andean Free Trade Agreement has the potential to provide real benefits to U.S. wheat producers and exporters, since Ecuador, Peru and Colombia have combined annual wheat imports of three million metric tons, according to a USWA news release. In view of the importance of the market, U.S. Wheat Associates and others urged the U.S. Trade Representative to hold firm in demands for zero tariffs on wheat, starting with day one of the FTA.

USW sent an urgent letter to negotiators as they were meeting in Ecuador last week. Joined by the North American Export Grain Association, the National Association of Wheat Growers, and the Wheat Export Trade Education Committee, USW explained that while the U.S. wheat industry is fighting hard for market share, Mercosur concessions and unfair trade practices by other exporters present problems. The Andean Free Trade Agreement — with Bolivia hopefully included soon — will offer the prospect for an increased U.S market share if it can counter these situations.

"We have been advised that the milling, baking and pasta producing groups in Peru, Ecuador and Colombia have come out in favor of establishing a zero duty on wheat imports at the start of the FTA. This is very encouraging news for U.S wheat producers," the groups stated.

To limit price surges and protect their producers, Colombia and Ecuador have established price bands, which they may be reluctant to give up — despite not having significant wheat production. Peru has an effective duty of 17 percent on wheat imports, which is a significant hurdle.

 source: DTN