US says reaches free trade deal with Colombia
Mon Feb 27, 2006
US says reaches free trade deal with Colombia
By Doug Palmer
WASHINGTON (Reuters) - The United States has reached a free trade deal with Colombia after nearly two years of talks, the U.S. Trade Representative said on Monday.
"An agreement with Colombia is an essential component of our regional strategy to advance free trade within our hemisphere, combat narco-trafficking, build democratic institutions, and promote economic development," U.S. Trade Representative Rob Portman said in a statement.
The United States started talks with Andean nations Colombia, Peru and Ecuador in May 2004 and wrapped up a deal with Peru in December. Talks continue with Ecuador while Bolivia, still an observer nation, could become part of the deal later, the USTR said.
USTR was expected to release details of the agreement later on Monday. The final negotiations focused mostly on agricultural issues, with Colombia seeking significantly more access to the U.S. sugar market and seeking continued protections for its own rice, poultry and potentially other agricultural producers.
Jorge Enrique Bedoya, executive president of Fenavi, a Colombian poultry trade association, said the agreement would open the Colombian market to flood of U.S. chicken leg quarters.
"The (Colombian) poultry industry could be wiped out in a couple of years," Bedoya told Reuters in an interview.
The agreement establishes a duty-free quota for 26,000 tonnes of U.S. chicken leg quarters, with about a 70 percent duty on imports about that level, he said.
Despite the steep out-of-quota duty, the agreement in effect means "immediate liberalization" of the Colombian poultry market because U.S. leg quarters are priced much cheaper than Colombian, Bedoya said.
The United States gave Colombia 50,000 tonnes of additional access to the U.S. sugar market, rather than the 1 million tonnes it initially requested and a subsequent scaled-back demand of 500,000 tonnes, Bedoya said.
Colombia had argued it need favorable agricultural terms to preserve and expand jobs in the rural sector, as it tries to stamp out drug trafficking and a 4-decade-old insurgency.
"It didn’t work at all," Bedoya said. "It seems that we believe we are more important for the U.S. than we are."
Two-way trade between the United States and Colombia was $14.3 billion in 2005. The Andean nation of about 43 million people was the second largest U.S. agricultural market in Latin America last year.
Colombia already has duty-free access for much of its exports to the United States under legislation that expires at the end of this year. Bogota’s desire to lock in those trade benefits was a driving force behind the trade talks.
