Letter to Congress to Support for the CAFTA-DR

April 4, 2005

Dear Member of Congress:

The undersigned groups representing the U.S. food and agricultural community urge your support for the Free Trade Agreement with Central American and the Dominican Republic (CAFTA-DR). CAFTA-DR is a home run for American agriculture. We are giving up very little to gain very much. Normally in trade agreements, each party expects the concessions it receives to balance the concessions it grants. Uniquely in CAFTA-DR, the agriculture agreement is tilted steeply in the direction of the United States.

Previous trade arrangements approved by Congress gave generous access to the U.S. market for food and agriculture exports from these six nations but provided no reciprocal benefits to U.S. food and agriculture exports to those same six markets. Between the Generalized System of Preferences, which has been in place since 1976, and the Caribbean Basin Economic Recovery Act, or Caribbean Basin Initiative (CBI), which has been in place since 1983, U.S. tariffs on most of the food and agricultural products imported from the CAFTA-DR countries are already zero.

On a trade-weighted basis, over 99 percent of the food and agriculture products we import from the region enter duty-free. On the other hand, the food and agriculture tariffs our products must overcome in the CAFTA-DR countries exceed 11 percent on average, but can range as high as 150 percent or more on sensitive products. This does not include the highly restrictive tariff-rate quotas many of our products face. The result is that we have an agriculture trade deficit with these six nations. In 2004, U.S. imports from these countries exceeded our exports to the region by over three quarters of a billion dollars.

So, a vote for CAFTA-DR is a vote to give American farmers trade reciprocity. It is also a vote to keep our food and agriculture exports competitive with products from other countries. Our market share in the CAFTA-DR nations has fallen from 54 percent in 1995 to around 40 percent because of preferential arrangements negotiated by these six countries with our competitors. The implementation of CAFTA-DR will remedy this problem.

Congress last voted to extend the unilateral benefits under GSP and CBI to these countries and others as part of the Trade Act of 2002. The most recent stand-alone vote on a CBI conference report in 2000 demonstrates the willingness of Congress to provide trade benefits to an important region of the world. In the Senate, CBI passed by a vote of 77-19 with 4 abstentions; in the House, it was approved by a vote of 309-110 with 16 abstentions. The undersigned organizations, representing the vast majority of U.S. agriculture, are simply requesting that Congress provide to American farmers what it has already provided to farmers in the CAFTA-DR countries - improved market access for their exports.

Sincerely,