As a cattle producer from the Eastern Plains of Colorado, where the local high school graduated 13 students last month, it may seem that I would not be concerned about selling beef in Central America. However, our industry works in a global market, and I am supporting the efforts of our government to level the playing field in Central America and the Dominican Republic through the currently proposed Central American Free Trade Agreement that is making its way through Congress.
Currently six countries – Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic – have the benefit of duty-free access to the U.S. beef market. However, U.S. beef exporters face unreasonable tariffs as high as 40 percent when sending our product to those countries.
Leveling the playing field through CAFTA would open new markets for U.S. beef, something that’s needed because the Japanese and South Korean markets are closed to U.S. beef because of differences over control of bovine spongiform encephalopathy (mad cow disease).
Our industry’s primary goal in negotiating this agreement was to reduce all duties to zero. If you are in a situation where unfair advantages are given to your “partner,” it is not a partnership at all. After difficult negotiations, an agreement was reached that will provide immediate duty-free access for high-quality U.S. beef and the eventual elimination of duties on all U.S. beef.
According to U.S. Department of Agriculture statistics, in 2003 we only exported an estimated 5,000 metric tons of beef and beef-variety meat to these countries, valued at $12.4 million, while importing 27,000 metric tons, valued at $62 million. These statistics show the potential as well as the lack of balance.
I am proud of the high-quality beef our industry produces and am excited about this opportunity to increase visibility and demand internationally. Many of the areas we are targeting are tourist locations where the high-quality U.S. prime and choice cuts of beef are in demand.
The U.S. Meat Export Federation, which is based in Denver, has data that show Central and South America are both markets in need of high-quality grain-fed beef that only the United States can provide to hotels and upscale restaurants in this region.
In addition, according to federation data, none of the Caribbean islands have beef-production levels that would be considered large by U.S. standards. The potential in these countries is also considerable since the tourism industries are among the largest moneymaking sectors.
I’m optimistic about the opportunities for the targeting of our high-quality U.S. product into tourist locations following the implementation of this agreement.
The CAFTA agreement, as well as existing rules, takes into account situations where a country might want to “dump” products, thus flooding the market. For those who are unnecessarily concerned about a “flood” of beef imports following the passage of CAFTA, it is important to note that even with the current market advantages these countries have, they are not filling their current quotas.
Another important point regarding the beef products from the CAFTA countries is that the products they produce are used in processed foods in the United States, and importing of these products should actually complement U.S. production.
As a cattle producer, I am concerned about the health of our animals as well as the safety of the public. I am confident this trade agreement will not jeopardize either because the United States always has the right at any time to stop imports of products that pose a human or animal health risk. These decisions will continue to be science- based.
Free and fair trade is a philosophy that our country should continue to aspire to, as we are part of a global economy. CAFTA allows us to step up the efforts in Central America and the Dominican Republic by leveling the playing field for trade between our countries.
While it may seem a long way from Kit Carson to Central America, in today’s world the distance is only as great as our imagination about the opportunities our country will have on a level trading field with the passage of CAFTA.
