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FTA deal to benefit U.S. wheat growersBy Leonard Schock Wheat grower and chairman U.S. wheat Associates The bipartisan deal announced in early May on free trade agreements is welcome news to U.S. wheat growers. We want to thank the Bush administration and Congressional leaders for working hard to open the door to voting on pending Free Trade Agreements that have the potential to significantly increase wheat exports. FTAs with Peru and Colombia, for example, will give U.S. wheat immediate duty-free access to these markets. This will help level the competitive playing field in two of our most important South American wheat markets that together may be worth as much as $200 million more in wheat export business. Recent news from Canada underscores how important it is to obtain immediate ratification of these pending agreements. The Canadian wheat Board, an aggressive competitor with U.S. wheat producers, has publicly urged its government to swiftly negotiate FTAs with Peru and Colombia because it says it will lose millions of dollars in export sales if the U.S. implements our pending FTAs. The CWB is right about that. Here's why: --The U.S. wheat industry has seen market share slip from more than 60 percent to less than 15 percent in Peru and from 65 percent to less than 30 percent in Colombia. --In both instances, most of the lost U.S. market share went to the CWB and Argentina. --These are price-sensitive markets. Argentina gets preferential tariff treatment under the Mercosur arrangement and the CWB uses its monopoly export power to compete with questionable trade and pricing practices. --If Canada obtains duty free access to these markets, the combination of their pricing practices and Argentina's market access will devastate the remaining U.S. market share and possibly shut U.S. wheat growers out of these markets in the near term. While we cannot control the impact that weather and supply patterns have on wheat prices, we can control our ability to enjoy preferential duties in both markets by immediately acting to ratify the Peru and Colombia FTAs. This action will increase market access, provide a semblance of price parity and help us maintain a strong competitive position in these important markets. The U.S. wheat industry also supports immediate action to ratify FTAs with Panama and South Korea. We believe these free trade agreements are good for U.S. agriculture, good for the U.S. wheat grower and help strengthen positive international relationships. We encourage on-going efforts to move implementing legislation to the Hill as soon as possible for consideration. Date: 6/22/07
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