Central America Becomes Ag Export Target
The dairy industry is closing ranks with representatives of other agricultural groups and the U.S. Trade Representative's Office to push for passage of the Free Trade Agreement with Central America and the Dominican Republic (CAFTA-DR). Congressional hearings have begun with a vote in the full House and Senate expected later this year.
Total agricultural exports to the five Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, along with the Dominican Republic could grow by $1.5 billion upon full implementation of the agreement, according to an analysis by the American Farm Bureau Federation.
Dairy industry officials say they are particularly excited about their prospects, pointing to new opportunities for U.S dairy exports in the region. The countries under the proposed agreement have expanding economies and growing populations that are building demand for dairy products much faster than the small dairy sectors in those nations can supply. Under CAFTA-DR, U.S. dairy exports into the region would likely grow, with all tariffs on U.S. dairy exports eventually phasing down to zero.
"This is a good opportunity for U.S. dairy producers to expand exports, while not facing an increase in imports from Latin America," said Jerry Kozak, President and CEO of National Milk Producers Federation. "In fact, it is exactly the sort of trade agreement that this administration should be pursuing - one in which the dairy industry, as well as many other U.S. industries, expects to gain."
According to an NMPF estimate, CAFTA-DR would result in increased income for dairy producers of approximately $100 million over the first decade of the agreement's implementation. U.S. dairy exports to the region totaled $80 million last year.