By Ambassador Allen F. Johnson
Chief Agriculture
Negotiator
Office of the U.S. Trade
Representative
Bracketed by the
Missouri and the Mississippi rivers, Iowa is at the crux of our agricultural
transportation system. Down these
mighty rivers pass billions of dollars of
U.S. agricultural products each year, many
destined for foreign shores. Many
of these products are raised or processed in Iowa.
Iowa is the nation’s leading producer of corn,
soybeans, and hogs. It is one of
the top ten producer of cattle and eggs. Iowa’s agriculture sustains a $12 billion
industry with farm and farm-related employment for 430,000 people. It is because
of this success that Iowa’s farmers and ranchers find themselves in
the heart 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 and
soybeans, in most years #2 for beef, and #3 for pork.
Exports are crucial to
Iowa’s farm economy. Exports accounted for over $3.5 billion
for Iowa farmers and ranchers in 2003. Iowa exports more corn, soybeans and pork than
any other state.
U.S. exports to our traditional markets continue
to grow. For example, soybean exports to
China, largest market, have more than doubled
since 1999 and reached nearly $3 billion in 2003. Soybean exports to
Mexico have also been increasing, up over 20
percent since 1999. 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. Pork exports to
Japan, our largest market, have grown by more than
50 percent since 1996 and in 2003 accounted for over $750
million.
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 Iowa producers. The CAFTA countries
(Costa
Rica, El
Salvador, Guatemala, Honduras, and
Nicaragua) for instance, have agreed to immediately
lock in zero tariff treatment for soybeans. 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. corn imports will be allowed immediately
without tariff and all corn tariffs removed over 15 years. Morocco will eliminate its tariff on corn five
years. Barriers to pork exports
will be removed in Australia, including some onerous sanitary
requirements that have stopped U.S. exports. Tariffs on pork will also be phased-out
completely in the CAFTA countries and
Morocco.
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, 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. 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.
China, as our top soybean market, has been a
particular focus in recent years and last month this work paid dividends as we
received assurances from China’s government that new Chinese import
regulations will not interfere with trade in
U.S. soybeans and other commodities. 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.
The barges will continue on course traveling
down the Missouri and the Mississippi.
But we are faced with a choice on how to proceed in the
U.S. approach to trade.
To build on
Iowa’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. 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 and to a
bright future.
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Ambassador Allen F. Johnson will be in Davenport, Iowa, Sept. 13, for an agricultural work day and
meetings to get first-hand knowledge from Iowa producers. The perspectives which he gains will
provide valuable insights with improve USTR’s effectiveness. The
Iowa work day is the fifth 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, a number of produce and
specialty crop farms in California in August 2004, and wheat farms in
Kansas earlier this month. In July, Amb. Johnson
returned from Geneva, where he helped negotiate the World Trade
Organization’s breakthrough framework agreement for historic reforms in global
agricultural trade. He 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.