USDA official: NAFTA a boon to U.S. agriculture shippers
A senior U.S. Department of Agriculture official told lawmakers Tuesday the 10-year-old North American Free Trade Agreement has been a “unqualified success” for U.S. agricultural product shippers to Canada and Mexico.
Under NAFTA, “markets continue to open and support a freer flow of agricultural products,” testified A. Ellen Terpstra, USDA Foreign Agricultural Service administrator, to members of the Senate Foreign Relations Committee. “Farmers in the three NAFTA countries benefit from the reduction of arbitrary and discriminatory trade rules, while consumers enjoy lower prices and more choices.”
U.S. agricultural commodity shipments to Canada and Mexico reached $17.2 billion in 2003.
“When you compare the performance of U.S. agricultural exports to our NAFTA partners with our export performance to the rest of the world, the difference is even more startling,” Terpstra said.
She pointed out in her testimony that in 10 years since NAFTA was implemented, global U.S. agricultural exports increased about $250 million a year because of the generally strong dollar, currency crises, and a global economic slowdown. But NAFTA exports to Canada and Mexico have increased more than $800 million a year for the past 10 years.
“A strong dollar hurt our exports in most of the world’s major markets,” Terpstra said. “However, in Canada and Mexico, the export losses associated with a strong dollar were more than offset by the export gains generated from significant improvements in market access provided under NAFTA.”
Many U.S. agricultural products benefit from NAFTA: processed grains, grocery products, corn, essential oils, poultry meat, soybeans, feed ingredients, beef products, cotton, wheat, sorghum and pork.
Some trade hurdles still remain in Canada and Mexico for U.S. agricultural shippers. For example, since 1999 Mexico has increased its use of sanitary and phytosanitary import regulations. The country has also used antidumping cases to increase duties or block agricultural trade from the United States, USDA officials allege. With Canada, there is the on-going dispute over softwood lumber imports. “For both Mexico and Canada, we are actively working on the trade disputes,” Terpstra said.
U.S. agricultural shippers should also benefit from the planned implementation of the Free Trade Area of the Americas, Terpstra said. The FTAA will be the largest trade zone in the world, with a combined gross domestic product of more than $13 trillion.
“Trade liberalization is critical to the economic future of our agricultural industry,” Terpstra added. “Access to growing markets is essential to the profitability of the U.S. farm sector.”