"A new era of trade with Columbia with the potential of greatly benefiting the U.S. beef and pork industries began [last] week with the conclusion of negotiations on a free trade agreement with Colombia," says USMEF President & CEO Philip Seng. "The office of the U.S. Trade Representative is to be commended for its commitment and success in these negotiations that will achieve greatly improved access for U.S. pork and beef to the Colombian market."
The office of the U.S. Trade Representative announced February 27 that the United States and Colombia have concluded their negotiations on an FTA. The FTA will immediately eliminate duties on many U.S. products exported to Colombia, including high-quality beef and will phase out duties on all beef and pork imports from the U.S. over a 10-year period. Under the terms of the agreement, Colombia will also lift its ban on imports of boneless and bone-in U.S. beef in two stages over the next three months. The agreement also includes a commitment by Colombia to recognize the equivalence of the U.S. meat inspection system and accept imports from all USDA-approved plants.
USMEF Director, Central & South America Ricardo Vernazza-Paganini hailed the agreement as an important opportunity for both the U.S. pork and beef industries. "Colombia will be a key South American market for both U.S. pork and U.S. beef," says Vernazza-Paganini. "Once the ban on U.S. beef is lifted, we will export an increasing number of livers, lungs and stomachs, which are much prized in Colombia. Our pork exports to Colombian processors will benefit greatly, and some of our cuts may be sold to retailers and the foodservice industry. As well as selling high-quality beef to the restaurants of Bogota, the U.S. industry will find an important market for beef variety meats."
U.S. pork exports to Colombia have been inhibited in the past by Colombia's complex and restrictive import duty system, but the FTA will establish a TRQ for backfat, hams, picnics and trimmings, and a separate quota for pork variety meat that will include feet, an important export item. The current annual market for pork is around 170,000 metric tons, imports account for 8,000 to 10,000 mt and most imports are from the United States (36%), Chile (35%) and Canada (25%). Colombia ranks third in the Central and South American region as a destination for U.S. pork exports, but from 1999-2004 U.S. pork exports dropped a total of some 50%.
Prior to the Dec. 2003 U.S. bovine spongiform encephalopathy case, the United States sent livers, lungs and stomachs to Colombia. In 2003, the U.S. exported 1,043 mt of beef variety meat and 443 mt of muscle cuts to Colombia. The quality of U.S. beef variety meat is much higher: U.S. livers are bigger, darker and better packed (two livers per box with a divider between them). Beef production is a traditional industry in Colombia and annual per capita beef consumption (37.4 lbs) is relatively high in comparison with other Latin American countries. The cattle herd numbers approximately 24 million head and annual beef production is around 700,000 mt. The herd is primarily zebu and average slaughter age is 4 to 4.5 years.
The current annual market for beef in Colombia is around 680,000 mt. Prior to December 2003, imports totaled an annual average of 5,080 mt and the biggest market share went to the United States (41%), Paraguay (22%) and Canada (18%).