USTR - Trade Works For Georgia’s Farmers and Producers
Office of the United States Trade Representative

 

Trade Works For Georgia’s Farmers and Producers
10/14/2004


By Ambassador Allen F. Johnson

Chief Agriculture Negotiator

Office of the U.S. Trade Representative

 

While Georgia was still a British colony back in the 1700’s, forward-thinking farmers speculated that they could produce silk and wine for export back to England.  Even though the silk and wine exports didn’t work out, Georgia’s farmers today produce and export peanuts, cotton, beef and poultry not only to England, but to the entire world.

 

Georgia is a leading producer of a broad variety of agricultural products including poultry, peanuts, beef, and cotton.  Georgia agriculture sustains a more than $6 billion industry with farm and farm-related employment for over 835,000 people.  It is because of this success that Georgia’s farmers and ranchers find themselves part of a national debate that will set the future course for the United States’ agricultural community. 

 

There are two possible visions for the future: one looks inward and is stagnant; the other is outward and dynamic.  The inward vision focuses only on supplying our domestic market.  To limit our ambitions to the domestic market is to endanger the growth prospects for this and future generations of U.S. farmers.

 

To sustain our productivity, we must recognize that a growing global economy creates new opportunities to access new customers and rapidly growing markets overseas.  Ninety-six percent of the world’s consumers live outside of the United States. 

 

As the world’s population and world food consumption continues to expand, so will the demand for the high-value products where the United States has a comparative advantage.  Nationwide, exports of agricultural products grew more than three times as fast as the total of all U.S. exports in the last year. The U.S. Department of Agriculture has forecast record agricultural exports of $62 billion for 2004. The United States is #1 in the world for exports of poultry meat, peanut butter, cotton and, in most years, #2 for beef.

 

Exports are crucial to Georgia’s agricultural producers.  Exports accounted for nearly $1 billion for Georgia farmers and ranchers in 2003.  Georgia is the top exporter of poultry and peanuts, and among the top ten states for tree nuts, cotton and seeds.

 

U.S. exports to our traditional markets continue to grow.  For example, fruit and nut exports to the EU were nearly $1.1 billion in 2003, a 33 percent increase over 1999.  Under NAFTA exports of U.S. poultry to Mexico, jumped from $16 million in 1994 to nearly $237 million in 2003.

 

Realizing the need to further expand markets around the world, we have completed free trade agreements with 12 countries in the last 3-1/2 years: Jordan, Bahrain, Chile, Singapore, Morocco, Australia, Guatemala, Costa Rica, El Salvador, Honduras, Nicaragua and the Dominican Republic.  The combined population of these countries represents a market of nearly 120 million people, which is roughly the size of the smallest 38 U.S. states. 

 

We are working on agreements with 10 more countries:  Panama, Colombia, Peru, Ecuador, Thailand, and the five-nations of the Southern African Customs Union (SACU). Last year, the U.S. exported $17.5 billion to these countries, which, taken together would rank as our 9th largest export market.

 

These new free trade agreements, when enacted, will expand opportunities for Georgia producers.  The CAFTA countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) for instance, have agreed to immediate duty-free access for cotton, and preferential tariff-rate quotas (TRQs) for poultry will result in new and growing access for those commodities as out-of-quota tariffs are phased out.  The Morocco agreement provides for immediate duty-free access for cotton and peanuts and new and growing access for U.S. poultry, including immediate duty-free access for some processed poultry products.  The Australia agreement established a new mechanism for enhanced cooperation on science-based measures that affect trade between the two countries.

 

We are also advancing U.S. interests in the World Trade Organization (WTO) by working to level the playing field for Americas’ farmers, ranchers and growers, who often face high barriers to our world class products.  Only in the WTO can all trading partners be brought to the table to secure a comprehensive deal that benefits U.S. agricultural interests by reducing all types of trade-distorting policies. 

 

The WTO framework agreement reached in late July in Geneva will benefit American agriculture:  eliminating export subsidies – including the over $7 billion a year the EU is allowed to spend on export subsidies on a wide range of products, including grains and poultry; reducing and further harmonizing trade distorting domestic support – in particular the over $80 billion a year the EU can spend on trade-distorting domestic support; and substantially increasing market access will benefit all of American agriculture.  Only by addressing these three pillars of agricultural trade together, farmers and ranchers in the United States and around the world can win.   In this framework we were also successful in working with the West African cotton producing countries in an agreement to address cotton as part of global agriculture negotiations with all trade distorting policies on the table rather than the focus solely being on U.S. subsidies.

 

The best way to address any distortions in world agricultural markets is through the WTO agriculture negotiations, not through litigation.  This is the message we have delivered concerning Brazil’s challenge of our agricultural support measures, including support for cotton farmers.  The September panel rulings provided some welcome findings, such as the fact that our decoupled income support payments have not caused “serious prejudice” under WTO rules.  However, we strongly disagree with some other aspects of the panel report.  We are defending our farmers by appealing these issues.  Frankly, the facts do not show that U.S. farm programs have distorted trade and caused low cotton prices. 

 

A level playing field for Georgia farmers and industries also means that they will continue to have recourse to strong remedies to address injurious dumped and subsidized imports.  Under the mandate for WTO rules negotiations that the United States insisted upon and obtained at the Doha Ministerial, the strength and effectiveness of our trade remedies will be preserved.

 

Enforcing existing trade agreements is just as important as negotiating new agreements.  For example, we have been actively engaged in working with the Chinese to ensure that their tariff rate quotas provide market access for U.S. cotton.  China is a critical market for U.S. cotton exports, now our number one market as it purchases over 20 percent of U.S. cotton production, and cotton in 2003 was our second largest agricultural export to China. 

 

Many of our day-to-day activities involve foreign sanitary and phytosanitary barriers – animal and plant health issues.  Together with the U.S. Department of Agriculture’s scientists and technical staffs, we are constantly working with industry to ensure that measures imposed by foreign countries, have a scientific basis and are not unnecessarily trade restrictive.   As needed and appropriate, we initiate dispute settlement cases.  In fact, the United States recently initiated a case against the EU and its’ restrictions on biotech products.

 

To build on Georgia’s proud agricultural traditions and heritage and to ensure new opportunities for the current and future generations of farm families, we must continue to embrace the outward vision as the road to the future.  By developing export markets and continuing our long-standing agricultural heritage, farmers and ranchers can look outward beyond America’s shores to the rest of the world.

 
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