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June 27, 2005   Email to Friend 

Jeff Helms
(334) 613-4212
June 27, 2005

MONTGOMERY, Ala.-- Alabama farmers and agriculture-related businesses would benefit if Congress approves the Central American Free Trade Agreement (CAFTA), according to the state's largest farm organization.

The Alabama Farmers Federation Board of Directors today passed a resolution supporting CAFTA, noting that the agreement would level the playing field for U.S. producers whose products currently face high tariffs in Central American countries.

"In terms of advantages of CAFTA for Alabama, it is clear that the lowering of high tariffs in the Central American region would benefit several Alabama products," said Federation President Jerry A. Newby, a Limestone County farmer. "Alabama currently exports $381 million in agricultural products a year, accounting for about 11 percent of the state's farm cash receipts. This agreement would ensure the continued expansion of this vital component of Alabama's agricultural economy."

Currently, about 99 percent of the products exported to the United States from CAFTA nations enter this country duty-free, under other agreements. But U.S. producers do not have similar access to Central American markets. Under CAFTA, the tariffs on U.S. goods going into Central America would be lowered or eliminated.

Newby said CAFTA not only will ensure fair trade for Alabama and U.S. farmers, it could help stabilize the economy and governments of Central America.

"CAFTA will expand the market for our agricultural products while improving the economies of Central American nations. That economic growth will make those countries better trading partners. We also have a commitment from the Bush Administration that it will prevent other countries from circumventing American trade policy by shipping their products through Central American ports into the United States," Newby said.

CAFTA implementation would be particularly beneficial to the state's poultry, beef, pork, peanut and cotton farmers, according to the Federation. Currently, Alabama poultry exports face duties as high as 164 percent in Central American countries. Under the agreement, duties would be immediately eliminated on chicken leg quarters, and duties on other poultry products would be gradually reduced over the next 10 years.

For the state's cattle producers, CAFTA would mean the immediate elimination of tariffs as high as 30 percent on prime and choice cuts of beef while duties on other products would be phased out in five to 10 years.

Peanut producers stand to benefit from CAFTA as well. Peanut tariffs would be eliminated immediately in El Salvador, Honduras and the Dominican Republic with duties in other countries being phased out in five to 15 years. Peanut butter duties would be eliminated immediately in Costa Rica, the Dominican Republic, El Salvador and Honduras. Nicaragua and Guatemala would eliminate their duties on the product within 10 years.

For cotton farmers, the agreement would secure a duty-free market for U.S. cotton products. It also would allow U.S. and Central America to better compete with Asia--which is rapidly increasing its share of the world cotton market.

Meanwhile, the National Pork Producers Council said the agreement would increase U.S. pork exports to Central America and the Dominican Republic by 20,000 tons per year. Under the agreement, the United States would receive sizeable quotas through which pork could be exported duty-free. Those quotas would gradually increase for 15 years when duties would be eliminated.

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