Defending An Annual $796 Million U.S. Corn Export Market

In 2017, the U.S. Grains Council (USGC) successfully defended its fourth-largest corn export market by removing a looming tariff threat before it became a problem. This allowed the free-flowing continuation of U.S. corn into the Colombian market, totaling 4.7 million metric tons of U.S. corn exports, valued at $796 million.

In May 2017, Colombia’s National Customs and Taxes Agency (DIAN) began issuing official notices to corn importers asking them to use a HS code for U.S. corn imports that was not included on the TRQ free-tariff benefit under the U.S.-Colombia Trade Promotion Agreement (CTPA). Shortly thereafter, the Colombian Cereals Growers Association (Fenalce), initiated a media campaign attack, arguing that U.S. corn imports were not in compliance with official requirements under the CPTA. It claimed that there were quality differences under coding regulations, therefore making U.S. corn ineligible to receiving the TRQ tariff-free benefit.

The Council, along with representatives the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA), immediately intervened, organizing meetings with key industry players to discuss customs disputes. The Council worked closely with importers, industry associations and traders throughout the process of clarifying this issue until it was solved in late October.

Collaboration with USTR and USDA/Colombia along with the Colombian industry was instrumental in defending this vital U.S. market. A strong relationship with its Colombian partners allowed the Council to be up-to-date with happenings regarding the issue and demonstrated the importance of the relationships that the Council has developed throughout years of active presence in Colombia.

A timely resolution of the situation was critical, or it would have impacted purchasing decisions as early as November for imports in early 2018. For 2018, out-of-quota U.S. corn is subject to a 10.4% import tariff. The risk of paying a duty on U.S. corn would potentially have favored non-U.S. corn origins when purchase tenders were to be evaluated.

The Council invested $20,126 Market Access Program (MAP) funds to eliminate this trade barrier. As a result, corn sales worth more than $796 million were defended, with a return on investment (ROI) of $39,551 per $1 of MAP funds invested.