Virginia Farmers Will Benefit.
Exports of farm products help boost Virginia’s farm prices and
income. Such exports help support about 6,888 jobs both on and off the farm in
food processing, storage, and transportation. In 2003, Virginia's farm cash
receipts were $2.2 billion, and agricultural exports were estimated at $436
million, putting its reliance on agricultural exports at 20 percent.
Implementation of the U.S.-Central America-Dominican Republic Free Trade
Agreement (DR-CAFTA) will increase Virginia’s exports of agricultural products.
Virginia Benefits From the U.S.- DR-CAFTA Free Trade Agreement
(FTA)
Despite over $1.6 billion in U.S. farm exports in 2003, DR-CAFTA
countries continue to impose high tariffs and other barriers on most
agricultural products, including Virginia’s key exports. A primary U.S.
objective was to change the "one-way-street" of duty-free access currently
enjoyed by most DR-CAFTA exports into a "two-way-street" that provides U.S.
suppliers with access to these markets and levels the playing field with other
competitors. This objective was achieved. Over 50 agricultural industry and farm
groups, including the American Farm Bureau support the FTA.
Poultry. Providing the largest
source of farm cash receipts and the 4th largest source of
agricultural exports in the state, Virginia poultry producers benefit from the
FTA.
- U.S. poultry exporters currently face duties as high as
164 percent on both fresh and frozen products, and the WTO permits duties as
high as 250 percent.
- Each DR-CAFTA country will provide immediate duty-free
access on chicken leg quarters, a product where the United States is the
world’s most competitive exporter, through country-specific TRQs that expand
annually as duties are eliminated in 17 to 20 years.
- Costa Rica and the Dominican Republic will establish
duty-free TRQs for chicken leg quarters totaling 850 metric tons, each
expanding by 10 percent annually. The other four Central American countries
will establish a total regional duty-free TRQ of 21,810 metric tons (with
individual country minimum quota levels). After year 12, the TRQ quantity
will be no less than 5 percent of regional chicken production.
- Duties on poultry products such as wings, breast meat and
mechanically de-boned poultry meat will be reduced more quickly, with many
eliminated within 10 years.
- DR-CAFTA countries are working toward the recognition of
the U.S. meat inspection and certification systems in order to facilitate
U.S. exports.
- The National Chicken Council, the USA Poultry and Egg
Export Council, and the National Turkey Federation have expressed support
publicly for the DR-CAFTA FTA.
Beef. As the 2nd largest
source of farm cash receipts, Virginia cattle and calve operators benefit from
the FTA.
- Current import duties on U.S. beef exports are as high as
30 percent, and the WTO permits duties as high as 79 percent.
- Duties on the products most important to the U.S. beef
industry – Prime and Choice cuts – will be eliminated immediately in Central
American countries, while the Dominican Republic will establish a zero duty
TRQ of 1,100 metric tons which expands annually as duties are eliminated.
- Some immediate duty-free access will be provided by
certain countries on other beef cuts through an initial TRQ totaling 1,165
metric tons, expanding annually until duties are fully phased-out.
- Duties currently applied to other beef products and beef
offals will be phased-out in 5 to 10 years.
- DR-CAFTA countries are working toward the recognition of
the U.S. meat inspection and certification systems in order to facilitate
U.S. exports.
- The American Meat Institute, the National Cattlemen’s
Beef Association, the National Renderers Association, and the U.S. Meat
Export Federation have expressed support publicly for the DR-CAFTA FTA.
Wheat. As the 2nd largest
source of state agricultural exports, Virginia wheat producers benefit from the
FTA.
- U.S. grain suppliers will benefit from zero duties
immediately on wheat in all six countries, as well as on some processed
grain products.
- The WTO generally permits duties up to 60 percent, but
can exceed 100 percent.
- The National Association of Wheat Growers, the
National Grain and Feed Association, the National Grain Trade Council, the
North American Export Grain Association, the U.S. Wheat Associates, the
Wheat Export Trade Education Committee, and the North American Millers
Association have expressed support publicly for the DR-CAFTA FTA.
Dairy. Providing the 3rd
largest source of farm cash receipts, Virginia dairy producers benefit from the
FTA.
- U.S. dairy exporters currently face duties as high as 60
percent, and the WTO permits duties as high as 100 percent.
- Each country will establish duty-free TRQs for certain
dairy products totaling over 10,000 metric tons across the six countries –
and each will receive the same level of TRQ access for dairy products
entering the United States.
- TRQs will grow by 5 percent per year for the Central
American countries and 10 percent per year for the Dominican Republic, with
certain dairy products subject to safeguards during the phase-out period.
- All Central American and Dominican duties will be
eliminated within 20 years, with duties on some dairy products eliminated
earlier.
- The National Milk Producers Federation, the U.S. Dairy
Export Council, the Grocery Manufacturers of America, and the National Food
Processors Association have expressed support publicly for the DR-CAFTA FTA.
Apples. Virginia apple producers,
with farm cash receipts of nearly $25 million, benefit from the FTA.
- DR-CAFTA countries currently charge duties as high as 25
percent on U.S. apples, and the WTO permits duties as high as 138 percent.
- These duties will be eliminated immediately under the FTA.
- The U.S. Apple Association and the Northwest
Horticultural Council have expressed support publicly for the DR-CAFTA.
Soybeans and Products. With nearly
470 thousand acres planted to soybeans, Virginia benefits from the FTA.
- Central American and Dominican import duties range from
zero to 20 percent, and the WTO permits duties as high 90 percent.
- DR-CAFTA countries will provide immediate duty-free
access for soybeans. Duties on soybean meal and flour will be eliminated
immediately in most DR-CAFTA countries.
- Most DR-CAFTA countries will immediately eliminate duties
on crude soybean oil, and the current duties on refined soybean oil phased
out over 12 to 15 years.
- The American Soybean Association, the National Grain and
Feed Association, and the National Oilseed Processors Association have
expressed support publicly for the DR-CAFTA FTA.