USDA chief promotes benefits of CAFTA to American meat shippers
U.S. Agriculture Secretary Mike Johanns told a group of American meat shippers in Washington Thursday that they stand to win if Congress passes legislation enacting the U.S.-Central American Free Trade Agreement (CAFTA).
CAFTA includes Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, in addition to the Dominican Republic.
“Within the agricultural community alone, exports to CAFTA nations totaled $1.8 billion in 2004,” Johanns told members of the U.S. Meat Export Federation. “Under CAFTA, we estimate that agricultural exports will double.”
Prior to the Dec. 23, 2003 case of a U.S. cow infected with bovine spongiform encephalopathy, or “mad cow” disease, American beef suppliers shipped an annual average of 4,424 metric tons, valued at $10.6 million, to the CAFTA countries. Import duties for these products ranged from 15 to 30 percent in the CAFTA countries and the World Trade Organization would allow those duties to rise as high as 79 percent.
Johanns said if CAFTA is approved, duties on beef — prime and choice cuts — would be eliminated immediately in these Central American countries, and phased out over time in the Dominican Republic.
He said immediate duty-free access would be provided for other cuts by the creation of a Tariff Rate Quota (TRQ), totaling 1,165 metric tons. Tariffs on offal and other products would be phased out over five to 10 years. The CAFTA countries also agreed to work toward recognition of the U.S. meat inspection and certification system, he added.
Johanns pointed out similar benefits of CAFTA for the nation’s pork shippers. Current pork exports to the region average 11,770 metric tons a year, bringing in more than $20 million annually. Those exports face tariffs as high as 47 percent and the WTO would allow tariffs to reach 60 percent.
Under CAFTA, a 13,613-ton TRQ would be created in the first year, and increased every year until tariffs are completely eliminated. Duties on bacon and some offal products would be eliminated immediately. American pork shippers would also benefit from CAFTA’s recognition of the U.S. meat inspection and certification system.
“The fact is that current trade barriers are part of an older, out-of-date world of agriculture,” Johanns said. “That new world of agriculture and commerce is one of open markets and access, where the playing field is level.”
In addition, Johanns said the U.S. Department of Agriculture would continue its work to reopen America’s beef trade with high-value markets such as Japan and Canada, which were closed due to BSE reasons. “I want to guarantee you something: I will not rest until Japan reopens its borders to American beef products,” he said.
Johanns noted that the United States must also do more to reestablish the beef trade with Canada, which had suffered from its own findings of BSE.
“If we demand a level playing field, we also have to offer one,” he said. “We cannot treat Canada one way and Japan another and expect that will go unnoticed.”