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COMMODITY FACT
SHEETS:
Dominican
Republic-Central
America-United States Free Trade Agreement (CAFTA-DR)
What’s at Stake for Poultry?
May 2005
On August 5, 2004, the United States signed the Dominican
Republic-Central America-United States Free Trade Agreement (CAFTA-DR) with Costa Rica,
Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The
agreement
will provide America’s farmers, ranchers, food processors, and the businesses
they support with improved, and in many cases, new access to this growing
regional market of 44 million consumers. The CAFTA-DR calls for eventual
duty-free, quota-free access on essentially all products, and addresses other
trade measures among the parties as well. Under the existing terms of the
Caribbean Basin Initiative, which the CAFTA-DR replaces, nearly all agricultural
exports from the CAFTA-DR countries to the United States already receive duty
free treatment. The CAFTA-DR levels the playing field, providing U.S. exporters
market access that is better than, or at a minimum equal to, that given to other
competitor countries.
U.S. Gains Improved Access to the Dominican and Central American Dynamic
Economies
Before CAFTA-DR. . .
U.S. poultry meat suppliers currently face tariffs as high as
164 percent on both fresh and frozen products in some countries, and the WTO
permits duties as high as 250 percent. From 2002 through 2004, U.S. poultry meat
suppliers annually shipped on average 73,195 metric tons (mt) valued at $51.4
million to all six countries combined. During this period, chicken leg quarters
accounted for approximately 55 percent (in value terms) of total U.S. poultry
exports to the Dominican Republic and Central America.
Non-science based sanitary-phytosanitary (SPS)
restrictions coupled with stringent import requirements further restrict U.S.
poultry meat exports to the CAFTA-DR region.
After CAFTA-DR. . .
Under the agreement, 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. Some tariffs on poultry products, such
as wings, breast meat and mechanically de-boned meat will be reduced more
quickly, with many eliminated within 10 years.
Costa Rica will establish a 330 mt TRQ for chicken leg
quarters in year 1, growing by 10 percent annually. The other Central American
countries will establish a total initial regional TRQ of 21,810 mt (with
individual country minimum quota levels). After year 12, the TRQ quantity will
be no less than 5 percent of regional chicken production. The tariffs on chicken
leg quarters will be eliminated in 17 years in Costa Rica and 18 years in the
other four Central American countries.
The Dominican Republic will establish an initial TRQ for
chicken leg quarters of 550 mt, growing by 10 percent annually. The Dominican
Republic will also establish a 440 mt TRQ for mechanically de-boned chicken,
growing by 10 percent a year, which will be phased out over 10 years, and a
3,850 met TRQ for turkey products, which will be phased out over 15 years.
In addition to providing market access through TRQs and
tariff reductions, each CAFTA-DR country is working toward the recognition of
the U.S. meat inspection and certification systems in order to facilitate U.S.
exports.
U.S. Consumers Benefit
Before CAFTA-DR…
U.S. tariffs on imported poultry meat from CAFTA-DR countries
are currently zero due to preferences granted under the Caribbean Basin
Initiative. In the recent years, the United States has not imported any poultry
meat from CAFTA-DR countries.
After CAFTA-DR. . .
Under this agreement, the zero duty on poultry and poultry
products is locked in immediately.
Return to
CAFTA-DR
Commodity Fact Sheets
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