While the Central American - Dominican Republic Free Trade Agreement (CAFTA-DR), awaits consideration in Congress, members of the Agriculture Coalition for CAFTA-DR early this week lined up alongside the Bush Administration in strong support of the pact. Absent from the list of supporters are sugar industry associations. The NFU and a bipartisan group of senators aren't in favor of the deal either.

At the Senate Finance Committee's first hearing on the agreement Wednesday, Jack Roney, Director of Economics and Policy Analysis for the American Sugar Alliance told committee members, "We regard this as a life or death issue for our industry."

In addition to job losses that he said would be 28 times greater than those expected to hit the next most-affected industry (textiles), he noted that long term, the trade deal sets a precedent that could result in a half million more tons of sugar flowing into the US. "The concessions, as they currently stand, would devastate our industry," he said.

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In a release from the American Sugar Association in March, a spokesperson noted CAFTA would bring more foreign sugar - 150,000 tons of sugar a year - to the US despite a domestic market already struggling with low prices. Since 1996, prices paid to America's sugar farmers and processors have fallen more than 20%.

It's also thought that the precedent set by the trade deal could not only collapse the US sugar industry, but it could also have a negative impact on the price of other commodities - if farmers migrated acres from sugar production toward other, more profitable crops.

CAFTA-DR includes the US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. It was signed by the US and five of the participating Central American countries at the end of May 2004. The Dominican Republic joined CAFTA last August.

It's still unclear when the Administration might send the pact to the Senate for a vote, but the Bush Administration is pushing hard for it saying it will benefit American manufactures, workers, farmers and ranchers through its market opening provisions.

Not so, say Senator Byron Dorgan (D-ND) and Lindsey Graham, (R-SC) who have banded together in an anti-CAFTA effort. The two wrote, in a letter to their colleagues, the deal "promises to wreak more of the damage that the North American Free Trade Agreement has already inflicted on our economy, by forcing us to compete with countries whose wage, worker safety and pollution standards are dramatically lower than our own."

Dorgan has said he intends to lead an effort in the Senate to kill the CAFTA agreement, saying "they ought to fix the problems they have created in previous trade agreements rather than agree to more unfair trade policies."

Many commodity groups see promise in the pact

Some of the nation's largest and most influential farm groups are on the Bush Administration's side of the argument, however.

On Monday, a trade briefing brought Agriculture Secretary Mike Johanns, US Trade Representative Ambassador Allen Johnson, and Undersecretary for Farm and Foreign Agriculture Services J.B. Penn together with the leaders of several of the agriculture organizations that are backing the trade deal.

"When you look at the aggregate, CAFTA-DR is a net positive for agriculture," said American Farm Bureau Federation president Bob Stallman. "The agreement will generate millions of dollars annually by eliminating tariffs on US agricultural goods."

Tariffs on almost all US products exported to CAFTA-DR nations will decrease to 0% after full implementation. Otherwise, US agriculture products entering the region without the agreement could be subject to up to 60% tariffs, Farm Bureau says.

National Corn Growers Association (NCGA) President Leon Corzine also stepped up, telling the participants at the Monday briefing, "US farmers want to be a supplier of choice - first choice - not residual. CAFTA-DR does this for us."

USDA values agriculture exports to the CAFTA-DR regions at more than $55 billion, with corn exports reaching 43 million metric tons valued at nearly $5.3 billion, NCGA says.

"It has always been NCGA's position that corn growers want income from the marketplace - the global market - and not from the government. To do this, we need the CAFTA-DR markets opened," Corzine said. He has urged the Administration to put its full strength behind the CAFTA-DR vote.

Pork, cattle producer groups see promising export market

National Pork Producers Council (NPPC) President Don Buhl reiterated his group's support for CAFTA-DR at the Monday trade briefing as well.

"This is a great deal for the US pork industry," he said. "With this agreement, we can reduce barriers to access for US pork and other agricultural products in important markets. Clearly, CAFTA-DR is a win not only for pork - but for all of American agriculture."

Buhl said NPPC is "deeply committed" to winning the CAFTA-DR vote and that pork producers all over the country will continue to work with other agriculture leaders in the Agriculture Coalition for CAFTA-DR to get the agreement passed by Congress.

"Pork producers are lobbying this issue and we have initiated a grassroots 'call to action' for pork producers to engage with congressional representatives," Buhl said. "Our state associations are working very hard to achieve this important trade agreement which will faster increase exports and improve the bottom line of US pork producers."

US cattle producers also say they're rallying for passage of the agreement because of the export markets it would create for US beef products.

"This agreement is a win-win for the US cattle industry," says John Queen, vice-president of the National Cattlemen's Beef Association (NCBA).

"These Central American nations and the Dominican Republic have a rapidly growing tourism industry, with hotels and resort communities that are an excellent market for high-quality cuts of US beef."

"Due to existing trade agreements, these countries already have duty-free access to the US market," Queen says. "CAFTA-DR levels the playing field for the United States and will provide immediate duty-free, quota-free access for high-quality US beef beginning on Day One of the agreement's implementation."

"In addition," Queen said, "all tariffs are eliminated by the end of the 15-year implementation period, which is a strong precedent to set in a trade agreement."

NCBA says its economic analysis of the agreement suggests that US beef and beef variety meat exports to these nations could reach $41 million compared with the current $12.5 million.

"At a time when many key export markets are still closed to US cattle producers, CAFTA will provide some very welcome new trade opportunities," says Queen. "This is why cattle producers across the US are rallying for final passage of CAFTA-DR, and we hope this will be accomplished by year's end."

NFU notes problems in CAFTA's labor, environmental regulations

The National Farmers Union, however, says CAFTA-DR would be detrimental to the livelihoods of American family farmers and ranchers. NFU President Dave Frederickson Monday shared his thoughts on the plan in a statement:

"We've heard these promises of prosperity of trade agreements in the past. For a variety of reasons they never seem to come true. I do not see what makes this one any different. CAFTA resembles failed trade policies of the past that further encourage a 'race to the bottom' for producer prices.

"CAFTA proponents overestimate the agreement's potential benefits, often ignoring the fact that nations included in CAFTA represent small populations with low purchasing power," Frederickson said.

He says many key US commodities already have virtually open access and control of the Central American market, in grain imports for example.

"This agreement also fails to address major issues that distort fair trade such as labor, environmental regulations and currency," Frederickson added.

Learn more

USDA's Foreign Agriculture Service (FAS) has created a Web page with links to factsheets for more information about CAFTA-DR. It includes information broken down by what's at stake for each of the major commodities and for farmers in each state: http://www.fas.usda.gov/itp/CAFTA/cafta.html

The Department of Commerce has more information, including the full text of the agreement here: http://www.ita.doc.gov/cafta/index.asp

For more information about the beef provisions of CAFTA-DR, and NCBA's economic analysis, visit http://hill.beef.org/cafta.