Senate CAFTA approval splits ingredients industry

- Last updated on GMT

Senate approval of the Central American - Dominican Republic Free
Trade Agreement (CAFTA-DR) has again divided the ingredients

While the president of the National Corn Growers Association​ (NCGA) president Leon Corzine said that the 54 - 45 vote in favor is good of US business, the Minnesota sugar industry claimed that the bill would "place farmers and workers at risk."

"Our grassroots membership has spoken and we applaud the Senate leadership for listening to the voice of agriculture,"​ said Corzine.

"However, our work is not yet over. The House will soon take up CAFTA-DR and legislators need to hear from their constituents on the importance of this bill."

The House is expected take up CAFTA-DR after its July 4 recess. If passed, it would eliminate most tariffs between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

A recent American Farm Bureau Federation (AFBF) analysis claimed that US agricultural exports would increase by $1.5 billion per year after full implementation of the agreement in 2024.

" CAFTA-DR improves our access to these markets,"​ said Corzine.

But opponents of CAFTA argue that the estimates of sizable trade gains for the US are overly optimistic. The Minnesota sugar industry recently released a statement, supported by American Crystal, Minn-Dak Farmers Cooperative, Red River Valley Sugarbeet Growers Association and Southern Minnesota Beet Sugar Cooperative, arguing that a vote for CAFTA, based on a short-term fix, threatens US jobs.

""The sugar industry has said throughout the debate on CAFTA that the agreement presents our industry with short-term and long-term problems,"​ said the statement.

"No deal was brokered that addresses our concerns with CAFTA. And, there appears to be no interest by the US Department of Agriculture or the US Trade Representative's office to find a long-term comprehensive solution."

Politicians concerned about the sugar recently met with White House officials, but no satisfactory conclusion was achieved.

The Bush administration signed CAFTA with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua last year and is hoping to secure the bill's passage this summer.

The US food industry, for the most part, has long voiced its support of the agreement, arguing that it would increase the country's export potential. "Since it is comprehensive, it will allow us to import key raw materials at more competitive prices,"​ said GMA president Manly Molpus at a recent Congressional hearing.

But Dave Frederickson of the National Farmers Union (NFU) argues that with a combined population of approximately 31 million people and with limited incomes, CAFTA nations have not enough purchasing power to make a significant difference to US food exports.

A House vote is likely to occur before August.

Related topics: Regulation

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