By Ambassador Allen F. Johnson
Office of the U.S. Trade
Every day, the barges on the
Mississippi, the freighters in Lake Superior, and the trucks and railcars that roll
throughout the state begin the journey that carries millions of dollars worth of
Minnesota agricultural products around the world. These exports are at the core of a
strong and growing agricultural economy for Minnesota.
is a leading producer of a broad variety of agricultural products including
corn, soybeans, pork, beef and dairy products.
Minnesota agriculture sustains more than an $8.5
billion industry with farm and farm-related employment for over 550,000 people.
It is because of this success that
Minnesota’s farmers and ranchers find themselves part
of a national debate that will set the future course for the
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
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, and wheat and, in most years, #2 for beef.
Exports are crucial to
Minnesota’s agricultural producers. Exports accounted for $2.6 billion for
Minnesota farmers and ranchers in 2003. Minnesota is a top ten exporter of soybeans, feed
grains, wheat, dairy products, processed vegetables, and meat
U.S. exports to our traditional markets continue
to grow. For example, soybean
exports to China, our largest market, have more than tripled
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 and
Canada our first and second largest market for
dairy exports. Dairy exports to
Mexico have increased 50 percent from 1993 prior to
the NAFTA agreement, and the U.S. enjoys a three to one surplus in dairy trade
with our NAFTA partners. Pork
exports to Japan, our largest market, have grown by more than
50 percent since 1996 and in 2003 were valued at over $750
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
The combined population of these countries represents a market of nearly
120 million people, which is roughly the size of the smallest 38
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
These new free trade agreements, when
enacted, will expand opportunities for Minnesota producers. The CAFTA countries
Salvador, Guatemala, Honduras, and
Nicaragua) for instance, have agreed to immediately
lock in zero tariff treatment for soybeans and have agreed to eliminate tariffs
immediately on high-quality 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. corn imports will be allowed immediately
without tariff and all corn tariffs removed over 15 years.
Morocco will eliminate its tariff on corn in six
years and has opened up a market for beef that was previously closed to
U.S. producers. CAFTA countries are an important growth
market for dairy products, and the CAFTA agreement will provide significant
duty-free market access for U.S. dairy products immediately, and eventually a
completely open market. 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
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.
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,
States recently initiated several such cases,
including against EU’s restrictions on biotech products.
continue the journey for Minnesota’s
agriculture products 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
shores to the rest of the world.