Tratados de libre comercio y políticas públicas agropecuarias para los productores de leche en colombia - Núm. 128, Enero 2014 - Revista Vniversitas - Libros y Revistas - VLEX 594727046

Tratados de libre comercio y políticas públicas agropecuarias para los productores de leche en colombia

AutorIldikó Szegedy-Maszák
CargoDoctoranda en Sociología Jurídica e Instituciones Políticas, Universidad Externado de Colombia
Páginas357-381

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Introduction

Certain actors of the Colombian dairy sector (especially dairy farmers)1are afraid that the implementation of the Free Trade Agreements (FTA) signed by the Colombian government will result in serious deterioration of the local dairy production in Colombia. There are opinions which go as far as foreseeing the disappearance of small local milk producers unable to compete against cheap imported products entering duty free or with reduced tariffs. The trade related market liberalization of the Colombian dairy sector became a central issue of agricultural policy debate in Colombia especially after the signing of the FTA with the European Union.2The dairy sector is one of the most protected agricultural sectors in several developed countries. The world dairy market is dominated by a limited number of exporting countries. On the other hand, only 7% of the world dairy production enters the international trading system (International Dairy Federation, 2010, 5). That way, as a general rule national production covers national consumption. Colombia falls into the example of mainly "self-suficient" national dairy markets, with limited export potentials, given the current prices due to the still existing protection of the local market by relatively high customs tariffs and quotas. On the other hand, the dairy sector faces severe problems of competitiveness. The domestic support measures for the sector in Colombia are low, especially compared with the EU and the US. Furthermore, available inancial resources to provide more support are limited.

The agricultural agenda is a highly debated issue of the World Trade Organization’s Doha Round, and contributed in a signiicant manner to the interruption of these multilateral market liberalization talks. On the other hand, it should be noted that the mere dismantling of protectionist policies in developed countries will not necessarily result in increased trade of agricultural goods for developing countries. Developed countries even without a subsidy system remain strong competitors. This is because there is a gap in

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technology and production levels between these two groups. Hence, there is a need to ind the way for developing countries to implement agricultural public policies (including certain protectionist measures) to further develop their sectors.

The Colombian agriculture in the 20th century had periods of uneven development. After the 1930s the agriculture had an important growth until the 1980s, since then the sector is mainly stagnating.3

It maintained a dual economy of large and small landholdings. The situation of small landowners has always been dificult. Forced displacement, social inequalities and violence have been the most inluential negative social factors in the Colombian agriculture. Cattle farming had a dominant role in Colombian agricultural development covering most of the agricultural land.

The Colombian State has been using trade related market liberalization policies to introduce competitiveness in the Colombian agricultural market.4Notwithstanding, the unilateral market liberalization policies of the 1990s did not result in enhanced competitiveness for the dairy sector. It cannot be expected that the opening of the uncompetitive Colombian dairy sector to strong international dairy trade actors such as the EU, the US but also Argentina and Chile will resolve the structural problems of the sector. Therefore, the lack of competitiveness of the dairy sector in Colombia must be treated by internal public policies. The government of Juan Manuel Santos Calderón proposed certain changes in agricultural policies in Colombia. As further argued in this article, its agricultural policies represent a combination of the promotion of agro-industrial development based on exportsand market oriented policies for small and medium size producers. The agrarian reform was also revived, which is at the same time linked to the launch of the peace talks with the guerrilla group FARC. Although, after two years and a half of President Santos in government, only certain mid-term results can be analyzed; it shows that a considerable amount of new policies have been put on track, while there is a risk of lagging behind in the effective implementation.

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The aim of the present article is to evaluate the dairy producers’ related agricultural policies of the Santos government. For the purpose of this revision the free trade agreements signed by Colombia with the United States of America and with the European Union are studied, as well as the related rural development policies implemented by the Santos government. The revision is limited in scope for the dairy sector related issues of these policy instruments. As a result of the above, the present article is divided in two sections:

i) Free Trade Agreements as policy tools; ii) Rural development policies and selected issues of the land question.

I Free trade agreements as policy tools

Export-oriented agriculture is the central issue of current agricultural policies in Colombia. It is based on the policy goal to enhance international competitiveness of the agricultural sector through negotiating free trade agreements.5Notwithstanding, as the example of the Colombian dairy sector shows, it is not necessarily true in all cases. As argued in the present chapter, the FTA with Mercosur and Chile resulted inrapidly growing imports. Additionally, the

FTA negotiated with the US (already in force) and with the EU (under ratiication), two of the most important dairy product exporters worldwide,6are expected to considerably effect the already uncompetitive Colombian dairy sector through increasing dairy product imports with very limited export possibilities. Whereas, the import of milk powder mostly hit Colombian dairy producers.

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Milk powder imports from Mercosur corresponded to USD 33.4 million (FOB) in 2012 (USD 24.7 million (FOB) from Argentina and USD 8.6 million (FOB) from Uruguay, amounting to 29.5% and 10.2% of all Colombian milk powder imports in 2012). In the same year Colombia imported from Chile 6,718 tons of milk powder (mostly whole-milk powder (WMP)), which was 500 tons more than from Argentina; and 2,865 tons of whey (resulting in the single most important origin of imported whey in Colombia), and 49.8 tons of cheese (more than all cheese imports from France and the Netherlands together).As a consequence of growing dairy product imports, especially from Argentina, the Colombian government announced on 13 January 2013 the application of a safeguard measure for milk powder originating from Argentina for a period of 90 days with possible extension up to 2 years, considering the 500% import growth of this product from that origin.7The US negotiated the Trade Promotion Agreement with Colombia from November 2003. The agreement was signed on 22 November 2006 and its Protocol of Modiications on 28 June 2007. The Agreement after long delay was finally ratiied in the US Congressand entered into force on 15 May 2012.The negotiations of the dairy sector were different to the negotiations of any other sector included in the Agreement and was irst to be negotiated by the private sector representatives of each party and then by the State delegations.8From Colombia Analac9led the negotiations. The negotiating position of Colombia for dairy products was offensive, except for milk powder and processed cheese.

Before the entry into force of the Agreement, dairy products originating in the US were charged by the MFN tariff of Colombia with Price Stabilization Mechanism of the Andean Price Band System. The Andean Price Band System was eliminated for all agricultural

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products (Appendix I Article 2b of Agreement). Additionally, Colombia unilaterally accepted to apply to US originating agricultural products the "other clause of preference" (Appendix I Article 2 of Agreement), according to which, preferential duties accorded in future preferential arrangements undertaken by Colombia after February 27 of 2006 must also be applied to US originating agricultural products. It means that all more favorable duty preferences provided in these agreements or arrangements are applicable upon entry into force to US originating agricultural products.

As regards dairy products, Colombia agreed to apply immediate duty free treatment for whey. For the rest of the dairy products tariffs were to be gradually eliminated in a period between 11 and 15 years, depending on the product. For the elimination period growing duty free quotas were also established for US originating dairy products. Quotas were established especially high for milk powder and cheese tariff lines. Colombia established its tariff base rate for dairy products in average between 20-33%, which was much lower than the effective MFN tariff at the time of entry into force of the Agreement.10For products originating in Colombia before the entry into force of the Agreement 3rd country tariff or the Andean Trade Promotion and Drug Eradication Act (ATPDEA) was applicable.11Nevertheless, ATPDEA did not apply for 04 dairy tariff lines, neither its predecessor the ATPA. In the Agreement for all dairy tariff line sub-groups the US provided a mixed either a) duty free or b) 15 years duty elimination or c) quota and 15 or 11 years duty elimination treatment.

Both Colombia and the US were in favor of eliminating export subsidies for agricultural products as regulated in the WTO system. On the other hand, Colombia wanted to negotiate the no reintroduction of export subsidies as well.12The other topic in discussion

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was the intention of Colombia to eliminate...

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