The American Farm Bureau Federation remains committed to a successful and positive negotiation for agriculture in the Free Trade Agreement of the Americas (FTAA). The U.S. Administration has proposed an ambitious trade agenda, which includes the FTAA and many other Free Trade Agreements (FTA), in the midst of current WTO negotiations. While we believe these FTAs are important in promoting and creating new trade relationships, our top priority is the current negotiations of the WTO. We believe that any FTA currently in negotiation or planned for the future should meet the same goals and objectives that have been set out by the United States in the WTO negotiations.

Trade in agricultural products among the nations of the Western Hemisphere could be expanded substantially, if the many and varied forms of impediments to that trade were eliminated. Our free trade agreement with Mexico demonstrates how farmers can benefit from freer trade. U.S. agricultural exports to Mexico and U.S. imports from Mexico have both more than doubled since 1993 as a result of NAFTA. The benefits of this trade to the consumers in each country -- in the form of more variety, reduced costs and often better quality food products -- also extend to the economy as a whole in the form of added disposable income and new employment opportunities.

U.S. agricultural exports to the non-NAFTA FTAA countries totaled $14.6 billion in 2002, about 27 percent of total U.S. farm exports. U.S. imports of agricultural products from non-NAFTA FTAA countries totaled about $14.9 billion in 2002, about 36 percent of our total agricultural imports.

The U.S. is a bigger and more open market for farm and food products. With a few exceptions, U.S. tariffs on agricultural goods from countries in the region are quite low or free. In many cases, our tariffs are already or will soon be free for products from FTAA countries under various special arrangements (e.g., the Caribbean Basin Initiative, the Andean Trade Preferences Act, the Generalized System of Preferences, NAFTA and the Chile FTA). As a result, the average tariff applied by the United States on imports from FTAA countries is certainly substantially less than the average 12 percent the United States applies on imports from the world. Tariffs and other forms of barriers to U.S. products in FTAA countries tend to be much more restrictive.

As tariffs and other trade barriers are gradually removed by all of the parties to the agreement, trade will expand both between the United States and the other FTAA participants and among the other FTAA countries. The fact that markets are being opened and shared among 34 countries will help to ensure that any single country does not become a dumping ground for other countries’ exports. More open import regimes and the economic growth the FTAA will bring to the hemisphere will generate greater demand in more countries for products that might otherwise flow to the United States.

Market Access

We believe that any negotiation on agriculture tariff rates should be done from the applied rate rather than the WTO bound rate. In many cases the tariff rates at which U.S. products are entering other markets are well below the WTO bound rates. Negotiating at rates higher than what are actually applied could lead to lost opportunities and place many sectors at a disadvantage in the negotiations.

The FTAA must provide for adequate transition periods for the elimination of tariffs and other protective measures, as well as workable safeguards to respond to disruptive import surges. Farm Bureau supports the staging modalities for the tariff negotiations, with at least a 12 year transition for the most sensitive commodities.

In regards to exclusion of agricultural products from the negotiations, we support a position that all agriculture products should be on the table and open for negotiations. Negotiations on market access must take place from the point where each country has placed all of its commodities in one of the tariff elimination categories. Negotiators can then carry on further discussions as to how the import-sensitive products should be negotiated and categorized.

Export Subsidies

The FTAA member countries should agree to ban the use of export subsidies in agriculture trade within the region, both on internal trade and on imports from non-FTAA countries.

Price Band

We support elimination of the price bands that some FTAA countries currently utilize.

Sanitary and Phytosanitary (SPS) Measures

In the area of SPS, we believe that major SPS concerns should be resolved prior to the conclusion of the FTAA negotiations. True access is contingent on resolving these issues.

Domestic Support

We oppose the negotiation of domestic support in the FTAA. Domestic support should only be negotiated in the WTO due to continued subsidization by non-FTAA countries.

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