Meat shippers await benefits of U.S.-Colombia trade pact
Meat exporters welcome the benefits that will come after Congress ratifies a U.S. free trade pact with Colombia.
“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-Pagnini, director of Central and South America and Global Strategic Coordination for the U.S. Meat Export Federation, in a statement.
Colombia struggles to maintain an efficient livestock and meat production system due to political unrest and corruption, and a 70 percent duty is applied to U.S. beef exported to Colombia, with the exception of a 300-metric-ton quota.
Beef products do not come from surrounding countries since they have access to only 1 percent of the Colombian market, so the United States has an opportunity to create a market for beef, according to Vernazza-Pagnini.
“There is very little awareness about U.S. beef among importers, food service personnel, retailers and consumers in Colombia,” he said. “Currently, products from Zebu cattle are available, which tend to be less consistent in quality.”
With the ratification of the free trade agreement, 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-metric-ton quota. U.S. beef variety meat would have a duty-free 4,200-metric-ton quota.
Meanwhile, U.S. pork exports are subject to a price band duty set by the Colombian government between 5 percent and 80 percent, averaging about 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, Vernazza-Pagnini said.
The free trade agreement would end the variable duty on U.S. pork and replace it with a 20 percent fixed duty that would phase out in five years to allow duty-free access.
Pork is also difficult to sell in Colombia. The meat is often viewed as unsafe because it comes from dirty animals.
The federation faced similar perceptions to pork in other countries. Through better marketing, U.S. pork exports to Guatemala through August increased 29 percent in volume to 3,935 metric tons and 27 percent in value to nearly $7.9 million compared to the same time last year.
“We have an opportunity to work with Colombian pork producers as we did in Guatemala to turnaround the perception that pork is unhealthy,” Vernazza-Pagnini said.
Although there are no official statistics, the federation estimates about 50 percent of pork production in Colombia comes from family-owned farms where the main distribution channel is through wet markets and butcheries. Pork processors prefer U.S. pork due to its consistent quality and supply.