Milling & Baking News - October 18, 2011 - 35

Food groups applaud quick action on trade agreements
WASHINGTON — Both houses of Congress have approved free trade agreements between the United States and South Korea, Colombia and Panama. The votes, which included overwhelming Republic support and some Democrat votes as well, came less than two weeks after President Barack Obama submitted the legislation to Congress. “Growing American exports to South Korea, Colombia and Panama will support tens of thousands of jobs here at home,” said Ambassador Ron Kirk, the U.S. Trade Representative, ahead of the vote. “We must take every opportunity to get America back to work.” Mr. Kirk said the Obama administration in 2010 and 2011 worked with South Korea, Colombia and Panama to address outstanding issues related to each of the three agreements. In particular, the administration secured greater U.S. access to the South Korean auto market, increased labor rights and worker protections in Colombia, and enhanced tax transparency and labor rights in Panama, Mr. Kirk said. Several grain and food related groups offered resounding support for the pacts, also ahead of the votes in Congress. The National Grain and Feed Association (N.G.F.A.), which supported each of the three trade accords, said it welcomed President Obama’s decision to submit them to Congress for ratification under so-called “fast-track procedures.” “Trade is absolutely vital if the United States is to secure economic growth and create new jobs, including in rural America,” said Kendell W. Keith, president of the N.G.F.A. “Exports represent up to one-third of total usage of U.S. feed grains and 50% of total usage of U.S. wheat and soybeans — either as raw commodity exports or as value-added products, such as meat.” The N.G.F.A. noted that foreign competitors have negotiated and implemented trade accords with these important markets that have undercut U.S. agricultural competitiveness. For instance, the European Union-South Korea free trade agreement took effect July 1, while a Canadian-Colombia pact was implemented on Aug. 15. The Grocery Manufacturers Association also praised the Obama administration for submitting the trade agreements to Congress for approval. “The food, beverage and consumer packaged goods industry exports $50 billion worth of goods to 215 countries around the globe, generating a $10 billion trade surplus,” said Pamela G. Bailey, president and chief executive officer of the G.M.A. “By passing free trade agreements with South Korea, Panama and Colombia, we will create a level playing field for U.S. products that increase our competitiveness in those countries and help the food, beverage and consumer packaged goods industry innovate, expand and create new jobs.” Under the Korea-U.S. Free Trade Agreement, nearly two-thirds of U.S. agricultural exports to South Korea would become duty-free immediately, including wheat, corn, soybeans for crushing, and other processed and

high-value agricultural products. In fiscal 2010, the United States exported $2 billion in grains and feeds and $644 million in oilseeds and products to South Korea, which accounted for 54% of all agricultural exports to the Asian market. Under the Colombia Trade Promotion Agree-ment, more than 80% of U.S. agricultural exports to that country would become duty-free immediately, including wheat, soybeans, soybean meal, and other processed and highvalue agricultural products. In fiscal year 2010, the United States exported to Colombia $354 million in grains and feed ingredients, as well as $165 million in oilseeds and products, which accounted for 54% of all U.S. agricultural exports to that Latin American market. The U.S. market share in Colombia, especially for feeds and grains, has been declining because of competitors’ advantages with their own trade preference agreements. For example, the United States traditionally has been the top supplier of corn, wheat and soybeans to Colombia, accounting for 76% of the market as recently as 2007. But by 2010, the U.S. market share had declined to 27% for these products with most of the business lost to Colombia’s Mercosur partners Argentina and Brazil. Under the Panama Trade Promotion Agreement, more than half of U.S. agricultural exports to Panama would become duty-free immediately, including soybeans, soybean meal, wheat, barley, and other processed and high-value agricultural products. In fiscal 2010, the United States exported $152 million in grains and feeds and $71 million in oilseeds and products to Panama, which accounted for 55% of all U.S. agricultural exports to Central America. MBN company, as a means to enter into the flour mill market of Indonesia.” Toyota said construction of the flour mill is expected to begin next year, with operations beginning in 2013. The mill is expected to have flour production capacity of 1,500 tonnes per day. “Toyota Tsusho has been concentrating the company’s efforts in the food industry, particularly in the grain business, as a field of concentration outside the automotive industry, intending to enhance and expand the company’s value chain for increased stable procurement and supply in order to continue responding to demands for grain in Asia into the future,” the company said. MBN
Milling & Baking News October 18, 2011 / 35

Toyota partnering in ﬂour mill alliance in Indonesia
TOKYO — Toyota Tsusho Corp., along with Malayan Flour Mills Berhad, which is a major food processing corporate group in Malaysia, and FKS Capital, a food processing corporate group in Indonesia, have agreed to invest approximately $66 million to establish a flour mill company in Jakarta, Indonesia. “Consumption in Indonesia has significantly increased in recent years, due to the economic growth and increase in the population,” Toyota said. “Consumer needs are also diversifying, as
bakingbusiness.com / world-grain.com

the middle income bracket expands and urbanization progresses. A view of the flour mill market in this country reveals that the consumption of wheat flour is growing steadily, while the traditional food culture of rice still remains. This country is expected to become the largest wheat importing nation of Asia (one of the largest in the world) in the future. With such prospects of the future in view, Toyota Tsusho decided to inject capital into a flour mill company, which is a primary processing and manufacturing

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Export and Trade Issues

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Milling & Baking News - October 18, 2011

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