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.
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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.