America-United States Free Trade Agreement (CAFTA-DR)
Delaware Farmers Will Benefit
Exports of farm products
help boost Delaware’s farm prices and income. Such exports help support about
1,880 jobs both on and off the farm in food processing, storage, and
transportation. In 2003, Delaware’s farm cash receipts were $760 million, and
agricultural exports were estimated at $119 million, putting its reliance on
agricultural exports at 16 percent. Implementation of the Dominican
Republic-Central America-United States Free Trade Agreement (CAFTA-DR) will increase Delaware’s exports of agricultural products.
Delaware Benefits From the
U.S.- CAFTA-DR Free Trade Agreement
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 Delaware’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.
Contributing over 70 percent of the state’s farm cash receipts at $543 million
and as the state’s leading export sector, Delaware 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 CAFTA-DR 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.
CAFTA-DR countries are working toward the recognition of
the U.S. meat inspection and certification systems in order to facilitate
The National Chicken
Council, the USA Poultry and Egg Export Council, and the National Turkey
Federation have expressed support publicly for the CAFTA-DR FTA.
Soybeans and Products.
As the state’s 2nd leading source of state farm cash
receipts at $36 million and the 4th largest export sector, Delaware
soybean producers benefit from the FTA.
CAFTA-DR countries will provide immediate
duty-free access for soybeans. Duties on soybean meal and flour will be
eliminated immediately in most CAFTA-DR countries.
Most CAFTA-DR 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 CAFTA-DR FTA.
state’s 3rd largest source of farm cash receipts at nearly $35
million, Delaware corn producers benefit from the FTA.
Costa Rica and the Dominican Republic will eliminate
their duty on yellow corn immediately. The other countries will provide
preferential access through individual duty-free TRQs totaling 1,151,259
metric tons initially, growing by 5 percent per year as the over-quota
duties are phased out over 15 years (10 years in the case of Guatemala).
All currently applied duties on corn products (including
corn flour, corn gluten feed, corn oil and high fructose corn syrup) will be
phased-out in 15 years.
The Corn Refiners
Association, the National Corn Growers Association, the National Grain and
Feed Association, the National Grains Trade Council, the North American
Export Grain Association, the U.S. Grains Council, and the North American
Millers Association have expressed support publicly for the CAFTA-DR FTA.
Contributing $18 million in
state farm cash receipts, Delaware dairy producers benefit from the FTA.
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
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.
Potatoes and Products.
With over $8
million in farm cash receipts, Delaware’s potato producers benefit from the FTA
All duties on potatoes will be eliminated over 15 years,
except for fresh potatoes in Costa Rica, where there will beliberalization
will occur through expanded TRQ access with an initial quantity of 300
Four Central American countries will provide immediate
duty-free access for frozen french fries, while the Dominican Republic will
phase-out duties over 5 years.
Access for frozen french fries into Costa Rica will
entail a 6 year tariff phase-out with a 2,631 metric ton TRQ growing at a 5
percent compounded rate.
The National Potato
Council, the American Potato Trade Alliance, Washington State Potato
Commission, 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.
As the state’s 3rd
largest export sector, Delaware wheat producers benefit from the FTA.
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.
State Fact Sheets