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

 

Trade Works For Missouri Farmers and Ranchers
09/17/2004


By Ambassador Allen F. Johnson

Chief Agriculture Negotiator

Office of the U.S. Trade Representative


Missouri’s history is full of pioneers and adventurers.  Just one example is the Lewis and Clark Expedition which set out from St. Louis, Mo., 200 years ago this year to explore the west.  Just like these pioneers and adventurers, Missouri agriculture now stands poised at the brink of a new destination, but this time, that destination is the world.


As one of the nation’s top ten producers of cattle and calves, rice, corn, hogs and soybeans, Missouri’s agriculture sustains a more than an $4.8 billion industry with farm and farm-related employment of over 616,000 people. It is because of this success that Missouri’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 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 Missouri’s rice, cattle, and corn producers.  Exports accounted for $1.2 billion for Missouri farmers and ranchers in 2003.  Missouri is third in cotton and cottonseed exports and fourth in rice. 

 

U.S. exports to our traditional markets continue to grow. 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 two 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 concluded 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 ranks as our 9th largest export market.

 

These new free trade agreements, when enacted, will expand opportunities for Missouri 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.  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 at the end of July 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 just on 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.  Only by addressing these three pillars of agricultural trade together, all U.S. farmers and ranchers can win. 

 

Working on the day-to-day activities involving foreign phytosanitary barriers – animal and plant health issues.  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 Canadian 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. 

 

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 won a dispute with the Canadians over their illegal subsidy to its dairy industry and initiated a case against the EU and its’ restrictions on biotech products.

 

Like Missouri’s early pioneers and adventurers, we must look beyond our horizons to the opportunities and adventure ahead.  To build on Missouri’s 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.  Only by developing export markets and continuing our long-standing agricultural heritage, can farmers, growers, and ranchers look outward beyond America’s shores to the rest of the world.

 
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