Like two snails creeping toward the finish line of a race, free trade deals with Colombia are inching their way through the Canadian and U.S. governments.
Wheat industry groups in both countries have been urging their governments for months to move quickly to protect their respective competitive positions in the South American market.
But ratification has been held up by opponents concerned about peripheral issues involving human rights and environmental standards in Colombia.
The issue gained a new sense of urgency in recent weeks, after Colombia imposed a 15 percent tariff on wheat imports.
Read Also
Europe holds promise for Canadian lentils
Pulse Canada is trying to help boost lentil consumption in Europe, which is already the fourth largest market.
The tariff was triggered automatically by low world wheat prices and is intended to protect Colombia’s domestic wheat producers from cheap imports.
The 15 percent tariff translates into roughly $40 a tonne on high quality red spring wheat that the Canadian Wheat Board sells into that market, and about $35 on lower quality winter wheat.
CWB chief executive officer Ian White last week warned members of Parliament that if the U.S. gets a free trade agreement in place before Canada, there could be serious consequences.
“We urge all MPs to support this deal and ensure that western Canadian farmers do not lose sales opportunities to their U.S. and Argentine competitors,” he said.
Argentina has duty-free access for its low quality wheat.
The bill to approve the deal was introduced in March and is hung up on second reading in the House of Commons.
Ironically, U.S. wheat groups have been making the same argument to their legislators, saying if they don’t ratify their trade deal, Canada will gain a competitive advantage.
The U.S. bill is stuck in the House of Representatives and is unlikely to be called for a vote soon.
Both the U.S. and Canadian deals would provide immediate duty-free access to Colombia.
In 2008-09 the U.S. held a 70 percent market share, while Canada is around 20 percent and Argentina around 27 percent.
CWB spokesperson Maureen Fitzhenry said that while the tariff is not huge, the issue is ensuring that this country remains on an equal footing with the U.S.
Canada sold 400,000 tonnes of high quality wheat and 40,000 tonnes of malting barley to Colombia in 2008-09, worth $135 million to prairie farmers.
The Alberta Barley Commission issued a news release supporting the board’s call for quick action by Parliament.
Commission chief executive officer Mike Leslie said the barley industry has worked hard to establish trading relationships in Colombia.
“Producers do not want to see this opportunity evaporate and they especially do not want to see this business go to competitors in the U.S. and Argentina,” he said.
In 2008, two-way merchandise trade between Canada and Colombia totalled more than $1.3 billion.
Canadian exports to Colombia totalled $703.8 million in 2008, including wheat, barley, lentils, industrial products, paper products and heavy machinery.
