America-United States Free Trade Agreement (CAFTA-DR)
Louisiana Farmers Will Benefit
Exports of farm products
help boost Louisiana’s farm prices and income. Such exports help support about
7,679 jobs both on and off the farm in food processing, storage, and
transportation. In 2003, Louisiana's farm cash receipts were $2 billion, and
agricultural exports were estimated at $486 million, putting its reliance on
agricultural exports at 24 percent. Implementation of the Dominican
Republic-Central America-United States Free Trade Agreement (CAFTA-DR) will increase Louisiana’s exports of agricultural
Louisiana 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 Louisiana’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.
Louisiana, the nation’s 3rd largest rice
producer with eleven milling establishments, benefits under the FTA.
U.S. rice exports face CAFTA-DR duties up to
60 percent, and the WTO permits duties as high as 90 percent.
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.
With cotton sales ranked 8th
nationally, Louisiana benefits from zero tariffs that the FTA locks-in
immediately for markets worth over $73.1 million to U.S. cotton suppliers. Under
the WTO, CAFTA-DR countries could raise duties on cotton to 35 to 60 percent,
depending on the country.
Providing the 3rd largest source of
cash receipts in the state, Louisiana cattle and calve operators benefit from
Current import duties on U.S. beef exports
are as high as 30 percent, and the WTO permits duties as high as 79 percent.
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
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
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
With nearly 500,000 acres planted in corn,
Louisiana benefits from the FTA.
U.S. corn exporters face duties up to 35 percent, and the WTO permits
duties as high as 75 percent.
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 3rd largest export and 5th
largest source of farm cash receipts in the state, Louisiana soybean producers
benefit from the FTA.
Central American and Dominican import duties
range from zero to 20 percent, and the WTO permits duties as high 90
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.
The 2.4 percent of Louisiana farms engaged in
sugar production will face no cuts in the over 100 percent out-of-quota duty on
U.S. sugar that currently protects domestic producers.
The United States will establish TRQs for CAFTA-DR countries, starting at 107,000 metric tons. In the first year of
implementation, increased market access in sugar will amount to about 1.2
percent of annual U.S. sugar consumption. This amount grows very slowly by 2
percent a year into perpetuity, so that by year 15 of FTA implementation the
increased access on sugar (about 151,000 metric tons) amounts to about 1.7
percent of consumption. The United States will also establish a quota for
specialty sugar goods of Costa Rica in the amount of 2,000 metric tons
Provisions will ensure only net surplus
exporting countries in the region have access to the new access, and
provisions have been agreed to allow alternative forms of compensation to be
established to facilitate sugar stock management by the United States.
The Sweetener Users Association, the National
Confectioners Association, the Grocery Manufacturers of America, and the
National Food Processors Association have expressed support publicly for the
Sugar Production in Louisiana - Map (.pdf)
State Fact Sheets