Agriculture in the U.S.-Dominican RepublicCentral American Free Trade Agreement (DR-CAFTA) Page: 2 of 27
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Agriculture in the U.S.-Dominican Republic-
Central American Free Trade Agreement (DR-CAFTA)
Summary
President Bush on June 23, 2005, submitted to Congress a bill (H.R. 3045, S.
1307) to implement the Dominican Republic-Central American Free Trade
Agreement (DR-CAFTA). This initiates a 90-day period during which each chamber
will consider this measure on an up or down vote, with no amendments allowed. Of
the agreement's agricultural provisions, the issue of increased access for sugar from
the six countries allowed to enter the U.S. market appears to be pivotal as proponents
and opponents seek to line up votes. Discussions between Administration officials
and some Members of Congress continue on a possible deal to address the sugar
production sector's concerns. Sugar producers have stated these talks have not
resulted in a deal, and reiterated that their intent is to defeat the agreement.
In DR-CAFTA, the United States and six countries would completely phase out
tariffs and quotas - the primary means of border protection - on all but four
agricultural commodities traded between them in stages up to 20 years. The four
exempted products are as follows: for the United States, sugar; for Costa Rica, fresh
onions and fresh potatoes; and for the four other Central American countries, white
corn. If approved, the U.S. agricultural sector would over time gain free access to the
six highly protected markets on a reciprocal basis, matching these countries' current
duty-free entry for nearly all their agricultural exports to the United States. Other
agricultural provisions establish safeguards for specified agricultural products to
protect U.S. and the region's producers from sudden import surges; prohibit the use
of export subsidies between partners; and establish a mechanism to address sanitary
and phytosanitary barriers to agricultural trade. DR-CAFTA does not address the
issue of domestic subsidies that distort production or trade.
DR-CAFTA's provisions, once fully implemented, are expected to result in
trade gains, though small, for the U.S. agricultural sector. The U.S. International
Trade Commission (ITC) estimates that $328 million in additional exports (primarily
grains, meat products, and processed food products) would be offset by a $52 million
increase in imports (largely reflecting additional access granted for sugar and beef
from the six countries). Of the $2.7 billion increase in total U.S. exports that the ITC
projects under DR-CAFTA, 12% would be attributable to the U.S. agricultural sector.
Most U.S. commodity organizations, agribusiness and food manufacturing
firms, and the American Farm Bureau Federation (a general farm organization)
support DR-CAFTA, expecting to benefit from the guaranteed increased access to
the markets of the six countries. Cotton producers announced their support,
following a similar decision made by a major textile trade association. The U.S.
sugar industry strongly opposes the additional access for sugar imports from these
countries, fearing its economic impact on domestic producers and processors. This
sector views DR-CAFTA as setting a precedent for including sugar in the other free
trade agreements that the Bush Administration is negotiating. Two cattlemen trade
organizations hold differing positions on the agreement's beef provisions. The
National Farmers Union (a general farm organization) opposes DR-CAFTA. This
report will be updated to reflect developments.
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Jurenas, Remy. Agriculture in the U.S.-Dominican RepublicCentral American Free Trade Agreement (DR-CAFTA), report, June 24, 2005; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc815789/m1/2/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.