INTERNATIONAL TRADE

ASA Position

ASA supports legislation (H.R. 4645) that would normalize financial trade relations with Cuba by eliminating financing restrictions and the prohibition on travel. 

ASA supports Congressional approval of the Free Trade Agreements (FTAs) negotiated with Colombia, Panama, and South Korea. 

ASA did not support the text on agriculture in the Doha trade negotiations put forward in December 2008 because it did not offer a viable opportunity for meaningful improvement in agriculture market access commensurate with the reductions the U.S. was prepared to make in its trade-distorting domestic support programs. ASA urges the Administration to continue to insist that significant gains in market access must be achieved in any agreement.

Background

ASA supports negotiation of trade agreements that significantly improve access to foreign markets for U.S, soy and livestock products. We oppose legislation or other measures that are protectionist, and that encourage our trading partners to take similar actions. We support aggressive enforcement of existing agreements when importing countries create non-tariff trade barriers, including sanitary and phytosanitary measures, which are not justified by sound science.

U.S. soybean producers depend on exports of soybeans, soybean meal, soybean oil, and livestock products, which represent one-half of their annual production. ASA has supported every trade agreement submitted to Congress. However, an increasing number of countries are undercutting their commitments under existing agreements by restricting trade thorough import restrictions based on unjustified sanitary and phytosanitary issues. Existing agreements must be enforced, and future agreements must ensure that existing and potential non-tariff barriers are addressed before negotiations are finalized.

Cuba

ASA supports H.R. 4645, sponsored by Agriculture Chairman Peterson and 61 Members of the House, to establish a normal trading relationship with Cuba, including direct banking, elimination of the cash in advance rule, and unrestricted travel. ASA also supports the country’s eligibility for the Foreign Market Development (FMD) and Market Access Programs (MAP).

FTAs

The FTAs negotiated with Colombia, Panama and Korea would significantly expand U.S. exports of soy and livestock products to those markets. For its part, Colombia agreed to immediately eliminate tariffs on U.S. exports of soybeans, soybean meal, high quality beef, certain pork products, most kinds of poultry, and some dairy products. Colombia will also eliminate its price band system for U.S. imports.

Tariffs in Panama on U.S. soybeans, soybean meal, and crude vegetable oils will be removed immediately upon the entry into force of the FTA. Tariffs will also be removed immediately for high quality beef, certain chicken products, frozen whole turkeys and turkey breast, and pork variety meats.  In 2009, U.S. exports to Colombia of soybeans, soybean meal and soybean oil were valued at $141 million; U.S. exports to Panama were $56 million.

The FTA with South Korea could assist in removing or increasing import quotas, removing the 487 percent over quota tariff rate for soybeans, removing the VAT on SBM imports from the U.S., addressing the state-run trading monopoly in imports for soy food processing, and finally removing the prohibition in imports for full-fat soybean meal processing. In 2009, Korea imported $449 million worth of soybeans, soybean meal and soybean oil from the U.S. – a 34 percent increase from 2008.

WTO

The December 2008 WTO agriculture text would require the U.S. to reduce the cap on its trade-distorting domestic support programs from $49 billion to $13-$14 billion per year.  However, the text would allow developed countries to restrict tariff reductions on a substantial number of Sensitive Products, and developing countries could completely avoid tariff reductions on Special Products or use a Special Safeguard Mechanism to suspend imports when they exceed recent average levels. The imbalance of this approach forced ASA and other U.S. agriculture organizations to call for a suspension of negotiations on the grounds that “no agreement is better than a bad agreement.”