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STATE FACT
SHEETS:
Dominican
Republic-Central
America-United States Free Trade Agreement (CAFTA-DR)
California Farmers Will Benefit
May 2005
Exports of farm products help boost California’s farm prices
and income. Such exports help support about 129,560 jobs both on and off the
farm in food processing, storage, and transportation. In 2003, California's farm
cash receipts were $27.8 billion, and agricultural
exports were estimated at $8.2 billion, putting its reliance on agricultural
exports at 30 percent. Implementation of the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR) will increase California’s exports of
agricultural products.
California 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 California’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.
Dairy.
As the nation’s largest
producer and exporter of dairy products, with cash receipts of over $4 billion,
California 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.
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 CAFTA-DR FTA.
Fruits.
As the nation’s leading
exporter of fruits and preparations, California fruit producers benefit from the
FTA.
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As the state’s 3rd largest
source of farm cash receipts, California grape producers and processors
benefit from the immediate elimination of duties on grapes and raisins by
all CAFTA-DR countries. Current duties on grapes can reach 20 percent in
CAFTA-DR
countries, and under WTO rules, could rise to as high as 135 percent.
With nearly $250 million in cash receipts,
California peach producers and processors benefit from the immediate duty
elimination by all CAFTA-DR countries on fresh and canned peaches.
California pear producers also benefit from similar duty-free access
immediately on fresh and canned pears. Current duties on these products can
reach 20 percent in CAFTA-DR countries, and under WTO rules, could rise to as high as 138
percent.
The California Table
Grape Commission and the Northwest Horticultural Council have expressed
support publicly for the CAFTA-DR FTA.
Tree Nuts.
As the nation’s leading
exporter of tree nuts, California tree nut producers benefit from the FTA.
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Accounting for over $2 billion in farm cash
receipts and all of the nation’s production and exports, California almond,
walnut and pistachio producers benefit from immediate duty-free access from
all CAFTA-DR
countries.
Current duties on these products can reach 20
percent in CAFTA-DR countries, and under WTO rules, could rise to as high as 60
percent.
Blue Diamond Growers has
expressed support publicly for the CAFTA-DR FTA.
Vegetables.
As the nation’s leader
in exports and value of sales, California vegetable growers and processors
benefit from the FTA.
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With over $1.7 billion in cash receipts,
California lettuce producers benefit from immediate duty elimination by
Costa Rica, and phase-out in duties within 5 years by most other Central
American countries and within 15 years in all other countries. Current
duties on lettuce can reach 20 percent in CAFTA-DR countries, and under WTO rules, could rise to
as high as 60 percent.
Providing over $900 million in state farm
cash receipts, California tomato growers and processors benefit from the
immediate elimination of duties by all Central American countries on the
largest U.S. vegetable product export (tomato paste) to that region. Current
duties on tomatoes and other tomato products can reach 25 percent in CAFTA-DR
countries, and under WTO rules, could rise to as high as 60 percent. All
duties in this sector will be eliminated within 15 years, and earlier in
many cases.
With cash receipts over $800 million,
California broccoli and cauliflower producers benefit from elimination of
duties by CAFTA-DR countries within 12 years, and earlier (5 or 10 years) in
most cases. Current duties on these products can reach 20 percent in CAFTA-DR countries,
and under WTO rules, could rise to as high as 60 percent.
The American Frozen Food
Institute, the Grocery Manufacturers of America, and the National Food
Processors Association have expressed support publicly for the CAFTA-DR FTA.
Rice.
As the nation’s 2nd
largest rice exporter, California rice producers benefit from the FTA.
Each CAFTA-DR country will establish zero duty TRQs for
milled rice, and rough rice in all except the Dominican Republic (which will
have a TRQ for brown rice).
In the first year of the FTA, the TRQ access will total
over 400,000 metric tons immediately and will grow through the tariff
phase-out period.
The USA Rice Federation and U.S. Rice
Producers Association have expressed support publicly for CAFTA-DR FTA.
Cotton.
As the nation’s 2nd
largest cotton exporter, California’s cotton producers benefit from zero tariffs
that the FTA locks-in immediately for markets worth $73.1 million to U.S. cotton
suppliers. Under WTO rules, CAFTA-DR countries could raise duties on cotton to
35 to 60 percent, depending on the country.
Beef.
With cash receipts of nearly
$1.6 billion, California cattle and calve operators benefit from the FTA.
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.
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.
Wine.
As the nation’s leading exporter of other horticultural
products, including wine, California wine producers benefit from the immediate
duty elimination on standard-size bottled wine by all CAFTA-DR countries. Duties
on other wines will be eliminated within 15 years, and earlier in many cases.
Current duties on wines can reach 35 percent in CAFTA-DR countries, and under WTO rules, could rise to as high as 70
percent.
Sugar Production in California - Map (.pdf)
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CAFTA-DR
State Fact Sheets
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