ASA Urges Ratification of Central America Free Trade Agreement
April 11, 2005... Saint Louis, Missouri... The 26,000 members of the American Soybean Association (ASA) strongly support ratification of the Dominican Republic – Central America Free Trade Agreement (CAFTA). CAFTA immediately eliminates tariffs on all soy products, and expands access for pork and poultry products to Costa Rica, the Dominican Republic, Guatemala, El Salvador, Honduras and Nicaragua.
"Exports of U.S. soybeans, soybean meal and soybean oil to these countries currently account for more than $260 million in annual sales," said ASA Board member Scott Fritz, a soybean producer from Winamac, Ind. "CAFTA will improve and enhance trade opportunities, solidify our position as the preferred supplier of soybeans and soybean products, and open new opportunities for exports of U.S. livestock products to these Central American nations."
The U.S. concluded CAFTA with five countries (Costa Rica, Honduras, El Salvador, Guatemala, and Nicaragua) in 2003. The Dominican Republic joined in 2004. Ratification of CAFTA-DR is of critical importance to the entire U.S. agriculture sector. This agreement does not exclude any sector. Members of the World Trade Organization (WTO) are anxiously watching the CAFTA ratification process. There is no question that ratification of CAFTA-DR will strengthen the U.S. agenda in all other trade agreements, especially the WTO, while a failure would signal that the U.S. is not committed to the world trade agenda.
"More than 96 percent of the world’s consumers live outside U.S. borders," Fritz said. "As a result, U.S. soybean farmers are heavily dependent on expanding demand for protein, vegetable oil and livestock products in global markets. Fully 50 percent of annual U.S. soybean production is exported. Expanding demand and reducing tariffs and non-tariff barriers is key to preserving our opportunity for profitability."
CAFTA would immediately eliminate tariffs imposed on the exportation of U.S. soybeans, soybean meal and soybean flour. Tariffs on U.S. exports of soybean oil bound for these countries will be reduced over a 12 to 15 year period. These actions are expected to improve and facilitate the exportation of U.S. soybeans and soybean products to CAFTA countries, which may assist in keeping out competitive soybean products.
Duty-free quotas on all pork and pork products will increase each year, and tariffs also will be eliminated. Although it will take 15 years, U.S. pork exports to CAFTA nations will become completely duty-free in 2019. Domestic swine production accounts for 23 percent of all U.S. soybean meal consumption.
"ASA opposes exempting import sensitive commodities from Free Trade Agreement negotiations because exemptions invite similar actions by U.S. trading partners that could lead to excluding soy and livestock products from tariff reductions," Fritz said. "Eliminating tariffs and trade barriers that limit U.S. soybean exports is a top priority of the ASA."
Soybeans were planted on 28 percent of the United States’ cropland last year, and are the highest value U.S. agricultural commodity export. Half the value of the $18 billion U.S. soybean crop is exported each year as whole soybeans, processed soymeal and soyoil, or in the form of value-added foods such as pork, poultry, beef, dairy and fish products. The U.S. soybean industry has strongly supported expanding international trade by reducing tariffs and eliminating other trade barriers to increase access and encourage demand for soy and livestock products in global markets.
For more information contact:
Scott Fritz, ASA Board member, (574) 946-6592, firstname.lastname@example.org