CAFTA vital to US food exports, says GMA

- Last updated on GMT

Related tags: International trade

The Grocery Manufacturers of America (GMA) is urging for the
immediate passage of the Central America-Dominican Republic Free
Trade Agreement (CAFTA-DR) in order to expand export markets for
the US food industry.

"CAFTA-DR will enhance our export potential to Central America and the Dominican Republic,"​ said GMA President Manly Molpus at a recent Congressional hearing. "And since it is comprehensive, it will allow us to import key raw materials at more competitive prices.

"We simply cannot allow any products or sectors, including sugar, to be excluded from trade agreements. One exclusion leads to another and soon our agreements are gutted."

H.J. Heinz, Kraft Foods and Mars also gave their support to the agreement. In their remarks, representatives of all three companies underscored the importance of establishing comprehensive trade agreements that include all sectors and commodities.

Currently, the six CAFTA-DR countries enjoy duty-free access to the U.S. market. However, U.S. food and consumer product companies must pay tariffs as high as 66 percent to export their products to the region. Under CAFTA-DR, many of these tariffs would be eliminated, giving American farmers and businesses similar market access privileges to Central American and the Dominican Republic.

Senator Rick Santorum highlighted the benefits of CAFTA-DR for the U.S. food industry and agriculture, saying, that the U.S. food industry has literally nothing to lose with CAFTA. According to a study commissioned by GMA, exports of processed foods alone could increase by 84 percent in the first year of the agreement.

Unsurprisingly therefore, the GMA's position is backed by Agriculture Secretary Mike Johanns and various Senate leaders.

"We have the most productive producers in the world, but without export markets, the agricultural industry in many states would be in trouble,"​ said Johanns. "It's absolutely incumbent upon me to expand opportunities for trade, which is why the passage of CAFTA is such a high priority."

Emphasizing the importance of CAFTA-DR for farmers and processed food companies, Senate Finance Committee Chairman Charles Grassley said, that leveling the playing field with CAFTA is what makes this a fair trade agreement. "CAFTA takes what is a one-way preference program and turns it into a two-way street,"​ he said.

GMA​ is the world's largest association of food, beverage and consumer product companies. Led by a board of 42 Chief Executive Officers, GMA applies legal, scientific and political expertise from its more than 140 member companies to vital public policy issues affecting its membership.

Related topics: Regulation

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