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STATE FACT
SHEETS:
Dominican
Republic-Central
America-United States Free Trade Agreement (CAFTA-DR)
Indiana Farmers Will Benefit
May 2005
Exports of farm products help boost Indiana’s farm prices and
income. Such exports help support about 25,280 jobs both on and off the farm in
food processing, storage, and transportation. In 2003, Indiana's farm cash
receipts were $5.2 billion, and agricultural exports were estimated at $1.6
billion, putting its reliance on agricultural exports at 31 percent.
Implementation of the Dominican Republic-Central America-United States Free
Trade Agreement (CAFTA-DR) will increase Indiana’s exports of agricultural products.
Indiana 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 Indiana’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.
Corn. As the top source of farm cash
receipts at nearly $1.5 billion, Indiana corn producers benefit from the FTA.
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U.S. corn exporters face duties up to 35 percent, and the
WTO permits duties as high as 75 percent.
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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.
Soybeans and Products. As the
state’s 2nd leading source of farm cash receipts and top agricultural
export, Indiana 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.
Pork. With hog production the
state’s 3rd leading source of farm cash receipts, Indiana pork
producers benefit from the duty-free access on pork cuts for each CAFTA-DR
country.
The opportunity for trade created through the TRQs total
13,613 tons, expanding by 5 to 15 percent per year until duties are
eliminated.
Central American countries will immediately eliminate
duties on bacon and some offal products, while the Dominican Republic will
establish TRQs for bacon and fat that expand annually.
All CAFTA-DR duties will be eliminated within 15 years
and certain products will be subject to safeguards in some countries.
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 National Pork Producers Council, the American Meat
Institute, the U.S. Meat Export Federation, and the National Renderers
Association have expressed support publicly for the CAFTA-DR FTA.
Dairy. Providing the state’s 4th
leading source of farm cash receipts, Indiana 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
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.
Beef. Providing nearly $225 million
in farm cash receipts, Indiana 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.
Return to
CAFTA-DR
State Fact Sheets
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