Agricultural Liberalization Will Grow U.S. Farm Exports and Create American Jobs

Reduction of Trade Distorting Tariffs, Domestic Support and Export Subsidies Will Improve the Lives of Farmers and Consumers in the U.S. and Around the World.

Agricultural is a large component of worldwide trade and continues to be plagued by tariffs, quotas and trade distorting subsidies. The Doha Round promises to break new ground by bringing significant liberalization to agricultural trade.

U.S. average agricultural tariffs are 12 percent, while the EU average is 31 percent and Japan is 51 percent. The world average is 62 percent, and for industrialized developing countries like India the average is often over 100 percent. The benefit to U.S. farmers from reducing these barriers and increasing access to foreign markets is significant.

America's farmers are the most efficient in the world. Removing barriers to our farm exports will give our farmers access to a level playing field where they will be able to compete successfully for customers around the globe. Increased access to the growing global market is vital to the continued success of America's agricultural producers -- 96 percent of the world's consumers live outside the United States.

One in three acres of U.S. agricultural land is planted for export. Agriculture exports generate nearly 25% of gross cash farm receipts and support 750,000 American jobs. U.S. agriculture is two and one-half times more reliant on trade than are other sectors of the economy. Open world markets are critical to the continued success of this sector.

The benefits of agricultural exports extend far beyond the farmgate. They benefit the entire U.S. economy. Last year's export total of $62.4 billion generated $162 billion in economic activity in the U.S. economy.

USDA research shows that each billion dollars in agricultural exports supported over 15,000 jobs. Agricultural exports generate a greater share of total employment benefits to rural communities than other export industries. Expanding market access for our farm exports will mean even more employment in the sector.

Doha will also reduce foreign subsidies and export credits that prevent U.S. farmers from competing on a level playing field. Agricultural support programs in Europe, for example are four times that in the U.S. despite the fact that our agricultural economies are of equivalent size. Removing such trade distortions will give U.S. producers better access to worldwide markets.

High tariffs, particularly those very high rates in the developing world, are not only harmful to U.S. producers but also to impoverished consumers in the developing world who must pay inflated prices for basic foodstuffs. Successful Doha Round agricultural negotiations will substantially reduce tariffs on agricultural goods and result in deeper cuts to the highest, most distorting tariffs.

The benefits to developing countries from agricultural liberalization are substantial. If all member countries reduce tariffs and trade distorting agricultural policies the income gains for developing countries are estimated to be nearly $40 billion annually.

The global income gains from the Doha Round agricultural liberalization will be significant. If the Doha Round reduces tariffs, export subsidies, and domestic support programs by just 40 percent, the global income gains could be $70 billion annually.

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