When you farm lentils in Montana like Kim Murray does, you pay attention to what happens in Colombia.
That’s because when Colombia sits down to eat, lentils are almost guaranteed to be on the table. Whose lentils Colombia eats is turning into a pretty good trade war.
“We just became the largest lentil producing state in the nation last year. We grow large green lentils and Colombia likes large, green lentils,” Murray said. “Colombia is huge market for us potentially, but it all hinges on free trade agreements.”
Free trade with Colombia has been a mirage many Montanans have chased since President George W. Bush set trade terms with Colombia in 2006. The agreement was sold publicly as a logical step. The U.S. is Colombia’s largest trade partner and the countries did more than $27 billion in trade last year.
Colombia is also a key partner in the South American drug wars. However, the agreement stalled over labor and human rights issues and never received congressional approval.
Colombia’s economy is South America’s fourth largest. Montana exports to Colombia totaled $2.5 million in 2010, but farm and ranch groups say the outlook for even more business is promising.
What’s happened since the agreement stalled makes the wait all the more frustrating. Colombia’s economy has improved, along with the nation’s appetite for quality lentils and wheat. Now several other countries are reaching their own trade agreements with Colombia, including Canada.
Murray and others are frustrated that Canadian farmers could soon be doing business with Colombia without the 15 percent tariff that Canada and the United States currently both pay. If that happens, the U.S. is sure to be under-priced by its northern neighbors.
“We’re pushing Washington to move a little faster because if they don’t we’re going to get pushed out of the market,” he said.
Baucus in Colombia
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On Friday, Murray and others traveled to Colombia with Sen. Max Baucus, D-Mont, to make their case. Baucus is chairman of the Senate Finance Committee, which has sole jurisdiction over international trade.
The trade agreement seems to have momentum for passage by the middle of the year. Republicans are pushing hard for the trade agreement’s passage. President Barack Obama has said the trade agreement will be a priority, although many Democrats are still concerned about labor and human rights issues.
There’s a potential for wheat trade with Colombia as well, said Lola Raska of the Montana Grain Growers Association, who also is making the trip to Bogotá. The logistics of trade with Colombia have shifted in favor of Montana wheat over other grains, thanks to the county’s growing interest in higher protein grain and its willingness to travel far north to get it.
Canadian wheat sold to Colombia is shipped from Vancouver, British Columbia. Montana’s grain ships through Portland, making the difference in shipping costs negligible.
“There’s a lot of potential for Montana wheat and barley there,” Raska said. “We have been an exporter of wheat to Colombia in the past, but we have lost market share.”
Montana wheat farmers weren’t the only ones seeing their Colombian market share shrink. The United States accounted for 35 percent of Colombian imports in 2001, but 26 percent in 2010.
Colombia imports 97 percent of the wheat it consumes. But the U.S. share of the Colombian wheat market has plummeted from 73 percent in 2008 to 43 percent in 2010.
Baucus has asked U.S. Trade Representative Ron Kirk to come before the Senate Finance Committee in early March and identify whatever steps Colombia needs to take to clear the trade agreement for a quick vote.
But quick could still mean months of waiting. Canada’s trade agreement is expected to kick in this spring. China is approving its free trade agreement with Colombia.
Contact Tom Lutey at email@example.com or 657-1288.