South America | Colombia: A Significant Market For U.S. Red Meat Upon FTA Ra...

South America

Colombia: A Significant Market For U.S. Red Meat Upon FTA Ratification

When the U.S. Congress ratifies the free trade agreement (FTA) the Bush Administration signed with Colombia nearly a year ago, it will increase exports of U.S. beef and pork to the South American country.

Colombia is the third most populous country in Latin America, behind Brazil and Mexico, so there is demand for protein. Colombia struggles to maintain efficient livestock and meat production, however, due to continued political unrest and corruption.

USMEF Director, Central & South America and Global Strategic Coordination Ricardo Vernazza-Paganini recently traveled to Colombia for nearly two weeks to gather information on the market to use for planning purposes to expand U.S. red meat opportunities there.

“U.S. red meat products exported to Colombia will be more competitive to other products due to the preference of U.S. pork consistency by large processors and the higher quality of U.S. beef products compared to domestic or other imports,” said Ricardo Vernazza-Paganini.

Currently a 70-percent duty is applied to U.S. beef exported to Colombia, with the exception of a 300-metric-ton (mt) quota. With ratification of the FTA, U.S. Prime- and Choice-grade beef would have a zero duty and U.S. Select-grade beef would face a duty-free 2,000-mt quota. U.S. beef variety meat also would have a duty-free 4,200-mt quota.

Meanwhile, U.S. pork exports currently are subject to a price band duty set by the Colombian government between 5 and 80 percent, averaging around 30 percent. Since this duty is not set, uncertainty deters many exporters from selling product to Colombia and dissuades importers due to increased chances of losing potential profits due to higher tariffs. The FTA would eliminate the variable duty on U.S. pork and replace it with a 20-percent fixed duty that would phase out in five years time to allow duty-free access.

South America

Colombia: A Significant Market For U.S. Red Meat Upon FTA Ratification

When the U.S. Congress ratifies the free trade agreement (FTA) the Bush Administration signed with Colombia nearly a year ago, it will increase exports of U.S. beef and pork to the South American country.

Colombia is the third most populous country in Latin America, behind Brazil and Mexico, so there is demand for protein. Colombia struggles to maintain efficient livestock and meat production, however, due to continued political unrest and corruption.

USMEF Director, Central & South America and Global Strategic Coordination Ricardo Vernazza-Paganini recently traveled to Colombia for nearly two weeks to gather information on the market to use for planning purposes to expand U.S. red meat opportunities there.

“U.S. red meat products exported to Colombia will be more competitive to other products due to the preference of U.S. pork consistency by large processors and the higher quality of U.S. beef products compared to domestic or other imports,” said Ricardo Vernazza-Paganini.

Currently a 70-percent duty is applied to U.S. beef exported to Colombia, with the exception of a 300-metric-ton (mt) quota. With ratification of the FTA, U.S. Prime- and Choice-grade beef would have a zero duty and U.S. Select-grade beef would face a duty-free 2,000-mt quota. U.S. beef variety meat also would have a duty-free 4,200-mt quota.

Meanwhile, U.S. pork exports currently are subject to a price band duty set by the Colombian government between 5 and 80 percent, averaging around 30 percent. Since this duty is not set, uncertainty deters many exporters from selling product to Colombia and dissuades importers due to increased chances of losing potential profits due to higher tariffs. The FTA would eliminate the variable duty on U.S. pork and replace it with a 20-percent fixed duty that would phase out in five years time to allow duty-free access.