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STATE FACT
SHEETS:
Dominican
Republic-Central
America-United States Free Trade Agreement (CAFTA-DR)
Arizona Farmers Will Benefit
May 2005
Exports of farm products
help boost Arizona’s farm prices and income. Such exports help support about
7,520 jobs both on and off the farm in food processing, storage, and
transportation. In 2003, Arizona’s farm cash receipts were $2.6 billion, and
agricultural exports were estimated at $476 million, putting its reliance on
agricultural exports at 18 percent. Implementation of the Dominican
Republic-Central America-United States Free Trade Agreement (CAFTA-DR) will
increase Arizona’s exports of agricultural products.
Arizona Benefits From the
U.S.- CAFTA-DR Free Trade Agreement (FTA)
Despite over $1.6 billion in
U.S. farm exports in 2003, CAFTA-DR countries continue to impose high tariffs
and other barriers on most agricultural products, including Arizona’s key
exports. A primary U.S. objective was to change the "one-way-street" of
duty-free access currently enjoyed by most CAFTA-DR 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.
Beef.
As the state’s largest source of state farm cash
receipts at $761 million, Arizona cattle and calve producers benefit from the
FTA.
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Current import duties on U.S. beef exports
are as high as 30 percent, and the WTO permits duties as high as 79 percent.
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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.
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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.
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Duties currently applied to other beef
products and beef offals will be phased-out in 5 to 10 years.
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CAFTA-DR 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 CAFTA-DR FTA.
Dairy.
Contributing nearly one-fifth of the state’s farm cash
receipts at $413 million, Arizona dairy producers benefit from the FTA.
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U.S. dairy exporters currently face duties as
high as 60 percent, and the WTO permits duties as high as 100 percent.
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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.
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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.
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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 CAFTA-DR FTA.
Lettuce.
Contributing nearly 15 percent of the state’s farm cash receipts at $356
million, Arizona’s lettuce producers benefit from the FTA.
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The FTA will benefit from immediate tariff
elimination in the Dominican Republic and the elimination of duties over 5
years in El Salvador, Guatemala, and Nicaragua.
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Duties will be eliminated over 10 years in
Costa Rica and Honduras.
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Under the WTO, CAFTA-DR countries could raise
duties on lettuce to 35 to 60 percent, depending on the country.
Cotton.
Providing the state’s 4th largest
source of farm cash receipts ($183 million) and as the state’s largest export
sector, Arizona cotton farmers benefit from the FTA.
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The FTA will lock-in immediately zero tariffs
for markets worth $73.1 million to U.S. cotton suppliers.
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Under the WTO, CAFTA-DR countries could raise
duties on cotton to 35 to 60 percent, depending on the country.
Wheat.
As the state’s 5th leading export sector,
Arizona’s wheat producers benefit from the FTA.
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U.S. grain suppliers will benefit from zero
duties immediately on wheat in all six countries, as well as on some
processed grain products.
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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.
Grains Council, the U.S. Wheat Associates, and the Wheat Export Trade
Education Committee have expressed support publicly for the CAFTA-DR FTA.
Return to
CAFTA-DR
State Fact Sheets
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