USTR - Trade Works For Kansas Farmers and Ranchers
Office of the United States Trade Representative

 

Trade Works For Kansas Farmers and Ranchers
09/09/2004

 

By Ambassador Allen F. Johnson

Chief Agriculture Negotiator

Office of the U.S. Trade Representative

 

The honeybee, the Kansas state insect, is at the core of the growing process:  bees pollinate many crops and ensure continuation of the agriculture cycle.  In the same way, a strong and growing agricultural economy is at the core of prosperity for Kansas. 

 

As the nation’s leading wheat producer, and top ten producer of cattle and calves, corn, sorghum, and hogs, agriculture sustains more than an $8 billion industry with farm and farm-related employment for over 300,000 people. It is because of this success that Kansas’ 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 this fiscal year. The United States is #1 in the world for exports of corn, soybeans, cotton and wheat and, in most years, #2 for beef.

 

Exports are crucial to Kansas’ wheat, cattle, and corn producers.  Exports accounted for $3 billion for Kansas farmers and ranchers in 2003.  Kansas exports more wheat than any other state, it is second in livestock exports and third in sunflower seed and oil. 

 

U.S. exports to our traditional markets continue to grow. For example, wheat exports to Mexico and Nigeria, our third and fourth largest wheat markets, have nearly doubled since 1999 and are on track for new record highs in 2004.  For corn, exports to our largest market, Japan, continue to enjoy steady growth -- topping $1.7 billion in 2003 and on track to exceed that level this year.  Trade with our NAFTA partners has also continued to grow, making Mexico our second largest corn market and Canada our fourth largest corn market.  Together these countries account for $1 billion in export sales, nearly a 10-fold increase from 1993 prior to the NAFTA agreement.  Prior to disruptions from the Bovine Spongiform Encephalopathy (BSE) event in late 2003, U.S. beef exports had also been steadily growing, accounting for nearly 10 percent of total sales for U.S. producers.

 

Realizing the need to further expand markets around the world, we have negotiated free trade agreements with 11 countries in two years: 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 ranks as our 9th largest export market.

 

These new free trade agreements, when enacted, will expand opportunities for Kansas producers.  The CAFTA countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) for instance, have agreed to immediately remove tariffs on imports of prime and choice beef and will phase-out all beef tariffs over 15 years.  The Morocco agreement provides for new access to a market previously closed to U.S. beef, including by phased elimination of tariffs on U.S. prime and choice beef.  We created new access for U.S. wheat in Morocco that could lead to a five-fold increase in U.S. wheat exports over recent levels. We also achieved new opportunities with the CAFTA countries for corn, the region where corn was first propagated, where over a million tons of U.S. exports will be allowed immediately duty-free immediately and all corn tariffs removed over 15 years.

 

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 July 31 in Geneva will benefit American agriculture:  eliminating export subsidies (including the over $3 billion a year the EU is allowed to spend on export subsidies of beef and grains); 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.  By addressing these three pillars of agricultural trade together, all U.S. farmers and ranchers can win. 

 

Enforcing existing trade agreements is just as important as negotiating new agreements.  In the case of beef, that has meant working diligently with our customers overseas to explain the safety of U.S. product after a positive BSE finding from a dairy cow in Washington state.  A number of important markets have been reopened.  For example, exports to Mexico, our third largest market, is back up to 92 percent of previous levels and markets accounting for one-third of previous trade have been reopened and we continue to work on the rest. 

 

Many of our day-to-day activities involve foreign phytosanitary barriers – 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 several such cases, including against EU’s restrictions on biotech products.

 

Like the honey bee, trade has brought sweet returns to the Sunflower State.  To build on Kansas’ proud heritage and 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.

 

#

 

Ambassador Allen F. Johnson will be in Wellington, Yoder, and Hutchinson, Kans., on Sept. 10 and 11, for a series of agricultural work days and meetings to get first-hand knowledge from Kansas producers.  The perspectives which he gains will provide valuable insights with which improve USTR’s effectiveness. The Kansas work days are the fourth in a series of work days that he has scheduled to help him in his job as the U.S.’ chief agricultural negotiator. Previous work days were on a hog farm in Iowa in June 2003, a cattle ranch in Montana in June 2004, and a number of produce and specialty crop farms in California in August 2004.  In July 2004, Amb. Johnson returned from Geneva, where he helped negotiate the World Trade Organization’s breakthrough framework agreement for historic reforms in global agricultural trade.  Amb. Johnson grew up in Iowa working on soybean, corn, cattle, hog, and chicken farms. He also worked at grain elevators and feed and seed dealers, as well as building grain bins and farm equipment. His family still lives in rural Iowa.

 
click here for printer friendly version
 




Help Link Site Map Link Contact Us Link
 
 Search Title Image
Document Library Link
   
 
More on Agriculture
item: Agriculture
item: Recent Updates
item: Press Releases
item: Fact Sheets
item: Op-Eds
item: Speeches
Op-Eds
item: 2005 Op-Eds
item: 2004 Op-Eds
item: 2003 Op-Eds
item: 2002 Op-Eds
item: 2001 Op-Eds