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STATE FACT SHEETS:
 Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR)

Pennsylvania Farmers Will Benefit

May 2005
 

Exports of farm products help boost Pennsylvania’s farm prices and income. Such exports help support about 13,383 jobs both on and off the farm in food processing, storage, and transportation. In 2003, Pennsylvania's farm cash receipts were $4.2 billion, and agricultural exports were estimated at $1 billion, 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 Pennsylvania’s exports of agricultural products.

Pennsylvania 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 Pennsylvania’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 6th largest dairy exporter with farm cash receipts of $1.4 billion, Pennsylvania benefits 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 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.

Poultry. As the nation’s 8th largest poultry exporter and providing nearly $750 million in state farm cash receipts, Pennsylvania 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 U.S. exports.

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  • 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.

Beef. With farm cash receipts of $442 million, Pennsylvania cattle and calve operators benefit from the FTA.

  • 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 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.

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  • CAFTA-DR countries are working toward the recognition of the U.S. meat inspection and certification systems in order to facilitate U.S. exports.

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  • 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