CAFTA pivotal to future of U.S. trade agreements

WASHINGTON – When you talk agriculture in Washington these days, you talk exports. Free trade agreements. The World Trade Organization.
And the talk is divided along party lines, with the Republicans lining up to support an expanding U.S. global market and Democrats opposing international free trade agreements.
Ohio Farm Bureau members heard plenty from both sides as they visited their representatives on Capitol Hill March 8-10, and listed to the administration’s top ag staffers.
Can’t ignore signs. Ambassador Allen Johnson, chief agricultural negotiator for the United States, told the Ohioans the world’s trade borders are dissolving, with or without the United States.
“On a bilateral basis, the world is moving forward without us,” Johnson said.
And that global market is filled with 6 billion people whose per capita consumption is growing.
“If we want to paint a brighter picture for U.S. agriculture, that’s the vision we have to pursue,” the Iowa farm native said.
“Agriculture is the top trade priority for this administration.”
Multilateral vs. bilateral. The administration isn’t waiting for the broad, but slow-moving, WTO negotiations to open markets, Johnson said.
Bilateral trade agreements have been forged with 12 countries in recent years because the United States can’t afford to sit on its hands, he said.
“Other countries already have agreements with the countries we’re trying to get.”
CAFTA. The acronym NAFTA became a household word in the multi-year negotiations leading to President Bill Clinton’s signing of the bill in 1993. This spring in Washington, another bilateral agreement, CAFTA, is the latest trade talk of the town.
CAFTA stands for the Central American Free Trade Agreement, most recently signed by the Dominican Republic, El Salvador, Honduras and Guatemala.
Ultimate passage of the agreement would give the United States access to an additional 44 million consumers, according to a statement released last week by U.S. Secretary of Agriculture Mike Johanns.
The agreement would eliminate tariffs on trade between the countries and create preferences for U.S. goods over those of global competitors.
More at stake. Negotiator Johnson laid it on the line for the Ohioans: If CAFTA fails, the United States’ ability to lead on a global scale will be “cut off at the knees” and the United States will be seen as a “protectionist of one.”
“The WTO will not move if CAFTA fails,” Johnson said, “because we won’t be able to lead.”
And if the WTO isn’t moving, it will be more difficult for agriculture to complete more bilateral agreements, he added.
Sugar foes. A sticking point in the domestic CAFTA discussions is sugar and current U.S. sugar policy.
Opponents in the American Sugar Alliance say unneeded sugar imported under CAFTA would cost U.S. sugar farmers more than $180 million. The office of the U.S. trade representative counters that the amount of increased sugar market access would grow slowly over 15 years to about 1.7 percent of current U.S. consumption.
Although there is currently no legislation addressing CAFTA, the Farm Bureau supports the current administration’s free trade philosophy and delegates pushed CAFTA in individual legislator meetings last week.
Ag is hot potato. International trade policy prior to 2001 focused mostly on manufactured goods. But with the start of the Doha Round of WTO trade negotiations, the talk is turning to agriculture.
“Most of the low-hanging fruit has been picked,” explained U.S. Rep. John Boehner, referring to easily enacted reforms most countries implemented in earlier international trade negotiations.
“Now we’re getting to agriculture, which is near and dear to their hearts.
The recent WTO cotton ruling against the United States has major implications for future U.S. ag policy. “It’s going to have a tremendous impact on the next farm bill,” Boehner said.
J.B. Penn, USDA undersecretary for farm and foreign agricultural services, agreed.
Penn said the next farm bill will be determined based on domestic fiscal strength, the Doha Round negotiations, the WTO ruling, and the structure of agriculture and public perception.