Meat + Poultry - January 2004 - 17

CAFTA offers export opportunities

he United States and four Central American nations, including El Salvador, Guatemala, Honduras and Nicaragua,
concluded a comprehensive free trade agreement this past
month that will strip away barriers to trade, eliminate tariffs, open
markets and promote investment for all five countries.
"In early 2002 President Bush put forward his vision for a free
trade agreement with Central America that expands opportunity,
supports regional stability and economic development," said Robert
Zoellick, U.S. trade representative. "Negotiations began in January
2003 and now we have fulfilled that vision with a modern F.T.A. designed to tear down the tariff walls that block trade between the U.S.
and Central America."
The culmination of a year of intense negotiations, CAFTA fulfills a
key U.S. objective of opening markets with free trade partners, while
continuing to push trade liberalization through the Free Trade Area of
the Americas and globally in the Doha talks in the World Trade Organization. "The U.S. is committed to opening markets around the
world because American farmers, workers, consumers and businesses want to sell their goods and services," said Zoellick.

including prime and choice beef cuts, cotton, wheat, soybeans, some
fruits and vegetables, and processed food products. Tariffs on most
remaining U.S. farm products will be phased out within 15 years. U.S.
farm products that will benefit from improved market access include
pork, beef, poultry, rice, fruits and vegetables, corn, processed products and dairy products.
"The successful negotiation of CAFTA is a major achievement that
will benefit the U.S. red meat industry by winning greater access for
its products to markets with a potential for future export growth," said
Phil Seng, president and C.E.O. of the U.S. Meat Export Federation,
Denver. "The agreement will offer immediate access for U.S. beef exports into the four countries, and all tariffs on U.S. beef will be gone
by 2019."
U.S. prime and choice beef cuts are exempt from both tariffs and
quotas. Exports of all other beef products will see tariffs reduced to
zero over the next 15 years. Guatemalan tariffs will be phased out
over the next 10 years. U.S. beef exports to all four Central American
countries will not be bound to any quotas.
"The real significance of this agreement is it sets the tone for how

The successful negotiation of CAFTA is a major achievement that will
benefit the U.S. red meat industry.
Combined total goods traded between the U.S. and the four
CAFTA countries is $15.4 billion. "We expect new and expanded market access for a broad range of U.S. commodities," said Agriculture
Secretary Ann Veneman. "These include feed grains, rice, beef, pork,
poultry, horticultural products and processed, consumer-ready items.
Under this agreement U.S. agriculture exports,
now near $1 billion per year, will compete more
favorably in this nearby and growing market of
31 million consumers."
The CAFTA countries, and many other developing countries, already enjoy duty-free
access to the U.S. market for the majority of
their exports through trade preference programs provided by Congress to promote economic development.
Yet these countries often have high tariff and non-tariff barriers
for U.S. exports and impose restrictions on U.S. businesses. Trade
agreements like CAFTA reduce barriers to U.S. trade, but also require important reforms of the domestic legal and business environment that are key to encouraging business development and investment, according to Zoellick.
The draft text of the agreement is scheduled to be released this
month. Under the Trade Act of 2002, the Administration must notify
Congress at least 90 days before signing the agreement. The Administration expects to notify Congress early next year of its intent to sign
CAFTA. It will also continue to consult with Congress on the agreement to prepare the way for eventual consideration.
Once the agreement is finalized, more than half of current U.S.
farm exports to Central America will become duty-free immediately,

JANUARY 2004

future agreements will deal with U.S. red meat products," said Homero Recio, vice president, Western Hemisphere for U.S.M.F. "A precedent has been set for future bilateral agreements and a future F.T.A.
of the Americas agreement."
The United States will begin negotiations with the Dominican Republic early this year, and will seek to bring
that country into the CAFTA negotiations next
year, prior to Congressional action on legislation to approve and implement the agreement.
Recio expressed his hope that proposed free
trade agreement talks with the Dominican Republic will offer even better terms to the U.S.
beef and pork industries. "Although the countries of Central America are not in the first rank of U.S. beef and pork
export markets, tourism and the restaurant industry are recovering.
The current value of the dollar will also benefit our export industry."
Separately, the U.S. has also announced its intention to begin
F.T.A. negotiations with Panama, Colombia and Peru, to be followed
by Bolivia and Ecuador when they are ready, according to the U.S.
Trade Representative's office. In the Americas, the United States'
current and in process F.T.A. partners represent 68 percent of the
gross domestic product of the hemisphere. Zoellick's office continues
to push for an F.T.A. that will open more markets with Mercosur and
the Caribbean.
"This is yet another positive development for our currently strong
agricultural economy," said Veneman. "This agreement will provide
expanding long-term opportunities for our producers in a growth
market right here in our how hemisphere."
M&P

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Meat + Poultry - January 2004

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