America-United States Free Trade Agreement (CAFTA-DR)
Michigan Farmers Will Benefit
Exports of farm products
help boost Michiganís farm prices and income. Such exports help support about
13,300 jobs both on and off the farm in food processing, storage, and
transportation. In 2003, Michigan's farm cash receipts were $3.8 billion, and
agricultural exports were estimated at $842 million, putting its reliance on
agricultural exports at 22 percent. Implementation of the Dominican
Republic-Central America-United States Free Trade Agreement (CAFTA-DR) will increase Michigan’s exports of agricultural products.
Michigan 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 Michiganís 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.
As the leading source of state farm cash receipts, Michigan dairy
producers benefit from the FTA.
U.S. dairy exporters currently face duties as high as 60
percent, and the WTO permits duties as high as 100 percent.
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.
Soybeans and Products.
As the state’s largest agricultural export with cash receipts of
nearly $400 million, Michigan 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.
Providing the 3rd largest source of state farm cash
receipts, Michigan 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.
Including Dried Beans. As the nation’s 8th largest
agricultural exporter with farm cash receipts over $300 million, Michigan
vegetable producers benefit from the FTA.
With over $90 million in farm cash receipts, Michigan
potato producers benefit from immediate duty elimination on certain potato
products, including frozen french fries, which will be duty-free immediately
in most CAFTA-DR countries. All duties will be eliminated in 15 years,
except for fresh potatoes in Costa Rica, where liberalization will occur
through expanded TRQ access, with an initial quantity of 300 metric tons.
Current duties in the CAFTA-DR countries are generally 15 percent, and the
WTO permits duties as high as 60 percent.
With over $60 million in farm cash receipts, Michigan
dried bean producers benefit from immediate duty-free access for some dried
beans and phase-out of other duties in 5 to 15 years. The Dominican Republic
will provide a duty-free TRQ for mung, red, and kidney beans, of 8,560
metric tons, growing at a rate of 7 percent. All duties will be eliminated
in 15 years. Currently, import duties in CAFTA-DR countries are as high as
89 percent, and the WTO permits duties as high as 110 percent.
The National Potato Council, the American Potato Trade
Alliance, Washington State Potato Commission, United States Dry Bean
Council, 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 5th largest agricultural exports and
providing over $200 million in farm cash receipts, Michigan 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
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.
As the nation’s 6th largest exporter, Michigan fruit
producers and processors benefit from the FTA.
With farm cash receipts totaling nearly $150
million, Michigan apple and cherry producers benefit from immediate duty
elimination by all CAFTA-DR countries on apples and cherries. Current duties
on these product can reach 25 percent in CAFTA-DR countries, and under WTO rules,
could rise to as high as 60 percent
With farm cash receipts over $60 million,
Michigan blueberry producers benefit from immediate duty elimination by all
CAFTA-DR countries except Cost Rica, that will phase-out its 15 percent duty
within 5 years. Current duties on blueberries can reach 20 percent in CAFTA-DR
countries, and under WTO rules, could rise to as high as 60 percent.
The U.S. Apple
Association, the Northwest Horticultural Council, the National Food
Processors Association, and the Grocery Manufacturers Association have
expressed support publicly for the CAFTA-DR.
Sugar Production in Michigan - Map (.pdf)
State Fact Sheets