The Central American Free Trade Agreement (DR-CAFTA) is overwhelmingly a positive opportunity for U.S. agriculture, said American Farm Bureau Federation President Bob Stallman at a hearing on Capitol Hill.
Stallman, speaking before the Senate Agriculture Committee, told members, “If this agreement fails, it will be to the disadvantage of America’s farmers and ranchers.”
The United States will remain at a disadvantage in the competitive market unless DR-CAFTA is passed. “U.S. agriculture will continue to face applied tariffs of between 15 and 43 percent,” said Stallman. “DR-CAFTA will eliminate these barriers. This agreement provides balance by giving U.S. agriculture the same duty-free access that DR-CAFTA nations already have to our markets.”
Trade preferences provided under the Caribbean Basin Initiative (CBI) allow 99 percent of agricultural products from the Central American countries and the Dominican Republic to enter the United States duty free. AFBF analysis shows that U.S. agriculture would see increased agricultural exports in the amount of $1.5 billion by the end of full implementation.
“As a part of the agreement, the United States will allow DR-CAFTA countries to import an additional 164,000 short tons of sugar above their current sugar quota,” continued Stallman. “This additional sugar will have a minimal impact on the industry as demonstrated in our economic analysis.” AFBF expects the sugar industry to experience about an $80.5 million impact to an approximate $2.1 billion domestic industry.
Stallman also noted that there are protections in place in the agreement for the U.S. sugar industry. “Any sugar that the DR-CAFTA countries would export to the United States above their new sugar quotas would still be subject to a high tariff,” said Stallman.
Overall, the agreement places the United States in a very strong position to capitalize on major commodities and specialty crops.
“In looking at the variety of U.S. commodities that would benefit because of increased trade due to a Central America-Dominican Republic Free Trade Agreement, one can only conclude that a ‘Yes’ vote on DR-CAFTA is a vote for agriculture and agricultural exports,” concluded Stallman.