CAFTA on the table for increased trade
It’s an age-old fact that all good relationships are about give and take. U.S. Trade Representative Rob Portman says the same should apply to the trade relationship between America and six Latin American countries listed in the proposed Central America Free Trade Agreement (CAFTA).
“Already 80 percent of all imports from those countries are duty free, and 99 percent of the agriculture is duty-free,” Portman said during a conference call Wednesday. “We think that should be a two-way street.”
The agreement would open trade to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic, all of which currently have tariffs and other export barriers that make exporting any U.S. goods to those countries a pricey initiative.
According to Tom Toll, president of the Kansas Livestock Association, high end cuts of beef and pork currently have duties as high as 40 percent on them when exported to these Latin American countries. Such tariffs would be abolished if CAFTA is passed.
“The truth is there are fewer farmers and farming is becoming more efficient, so much so that the demand is not keeping up. There aren’t enough mouths to feed in the U.S.,” Portman said. “One out of every three acres is planted for exports. This agreement will allow our farmers to continue to enjoy the economic benefits they currently have.”
He said the same applies for the beef and poultry industry, noting that while the Latin American countries included in the agreement are ripe with seafood, beef – particularly high end beef – is a luxury there.
“They are the second-largest reef, second only to Australia’s Great Barrier Reef, but the kind of beef they raise down there is not for export,” he said. “The truth is beef exports will triple under CAFTA.”
With the growing tourism industry in those countries, Portman said, the demand for good beef will rise as well.
“The fact of the matter is if you can afford a plane ticket down there, you can afford a good steak,” he said.
Some cattle farmers have expressed concern that opening the trade to these countries would open the floodgates for countries other than those listed in the agreement to send beef to the United States via those countries, opening the U.S. to dangers of contamination and other dangers.
Portman said those concerns are completely unfounded.
“If other countries wanted to do that, they could already do that,” he said.
Portman stressed the importance of making the free-trade a two-way relationship with these countries as a way of competing with manufacturing moguls like China and Canada.
“These countries will grow and if we’re not there someone else will be,” he said. “This is in our backyard.”