Agriculture depends heavily on trade — U.S. farmers sell approximately one-third of what they produce overseas. The U.S. market for many agricultural products is relatively stagnant, so access to new markets abroad is critical for growth. The Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) represents a real opportunity to increase agricultural exports to a combined market the size of California.

Elimination of trade barriers promises growth for U.S. agricultural exports.

• Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic are already good markets for U.S. agricultural products. The United States is the region’s single largest source of agricultural products. However, the U.S. share has declined due in large part to preferential trade agreements between the Central American countries and other trade partners.
• DR-CAFTA will repair this imbalance by reducing to zero — immediately or over transition periods — tariffs affecting key U.S. exports to the six partner countries.
• Tariffs on products such as breakfast cereals, soups, cookies and pet food will receive immediate duty-free treatment. U.S. brands of processed foods are well known throughout the region, and tariff elimination will make U.S. products more competitive there. DR-CAFTA also will increase access to the region for U.S. pork and eliminate Central American tariffs on high-quality beef.
• DR-CAFTA will resolve sanitary and phytosanitary disputes that have blocked U.S. exports to the region.

DR-CAFTA levels the playing field for U.S agriculture.

• Under the Generalized System of Preferences program and the Caribbean Basin Initiative, the United States already provides virtually duty-free treatment to imports from the six DR-CAFTA countries. Coffee and tropical fruits, such as bananas, account for most of these duty-free imports.

• DR-CAFTA will level the playing field by lowering much higher tariff and nontariff barriers maintained by Costa Rica, El Salvador, the Dominican Republic, Guatemala, Honduras and Nicaragua to U.S. exports of food and other agricultural products. Without DR-CAFTA, U.S. food and agricultural exporters will continue to be prejudiced by nonreciprocal bilateral trade.

DR-CAFTA meets Trade Promotion Authority (TPA) negotiating objectives for agriculture.

• The principal negotiating objective established by Congress for agriculture in TPA is to obtain competitive opportunities for U.S. agricultural exports that are substantially equivalent to those afforded foreign exports to the United States. Our negotiators have met this objective in DR-CAFTA. U.S. treatment of agricultural imports from the region, largely barrier free at present, will be matched when DR-CAFTA is fully implemented with similar access for U.S. agricultural exports to the Central American partners.
• TPA further instructed U.S. negotiators to incorporate effective dispute settlement provisions for agricultural trade disputes, including unjustified sanitary and phytosanitary issues. Such provisions are part of DR-CAFTA.

U.S. agriculture endorses DR-CAFTA.

• America is a leader in the production and export of high-quality agricultural goods and food products. Access to foreign markets that offer real growth potential as foreign incomes grow, thus, is crucial not only to this sector but also to the many others directly and indirectly related to it. DR-CAFTA will enable U.S. agriculture to better compete in international markets. DR-CAFTA is supported by the Agricultural Policy Advisory Committee, the American Farm Bureau Federation, the National Pork Producers Council and other agricultural groups.

With nearly 95 percent of the world’s population living outside U.S. borders, increased access to international markets is critical to the future growth and prosperity of the U.S. agricultural economy. Trade agreements such as DR-CAFTA reduce tariffs and dismantle other barriers to U.S. exports to the benefit of American farmers and food producers.