By RAELYNN RICARTE
News staff writer
July 27, 2005
The Hood River Grower Shipper Association is praising a federal move to throw out tariffs on local fruit that is exported to six foreign nations.
Also expected to support the Central American and Dominican Republic Free Trade Agreement (CAFTA-DR) is the Hood River County Farm Bureau. Although the organization has not yet taken an official vote on the issue, President Ralph Smiley said the legislation is endorsed by the American Farm Bureau Federation — and associated groups usually follow suit.
“We definitely support CAFTA-DR, it’s one trade agreement that will benefit us. It opens up more of a market and puts us on a more even basis with other countries,” said Jean Godfrey, executive director of the Grower Shipper Association.
She said with China growing stronger in the worldwide market, it is vital for America to open up more trade avenues closer to home. CAFTA-DR will give U.S. agriculture a competitive advantage over exports to the six countries from South America, Europe and Canada.
Godfrey’s comments were echoed on Friday during a conference call on the issue hosted by U.S. Rep. Greg Walden.
He had asked six Oregon officials and farmers to address concerns with U.S. Trade Rep. Rob Portman and Agriculture Secretary Mike Johanns. Included in that conversation were: Barry Bushue, president of the Oregon Farm Bureau; Brad Anderson, president of the Oregon Wheat Growers League; Nels Iverson, vice-chair of the Oregon Potato Commission; Sharon Livingston, president-elect of the Oregon Cattlemen’s Association; June Hartley, fifth generation farmer from Malheur County; and Judge Dan Joyce, of Malheur County.
“I look at this as part of doing my due diligence on a very complex trade issue. I’m trying to hear from people on all sides of this and make sure that all questions are answered,” said Walden to his guests and media audience.
After listening to a wide range of topics discussed by his guests, Walden decided to vote in favor of CAFTA-DR.
His decision, in part, was also based on supportive correspondence from many constituents, including Fred Duckwall, president of Duckwall-Pooley Fruit Company in Odell. Duckwall urged Walden, on behalf of 80 local growers, to support CAFTA-DR because it created “fair, competitive export markets that are essential for growers’ survival.”
“It is more important than ever to make sure our growers and producers have as much advantage as possible in this global market. CAFTA-DR is one way of forcing Central American countries to immediately eliminate their tariffs on the fruit we raise and try to profit from,” said Walden.
He said it is impossible to “level the playing field” without a new trade agreement since most fruits being sold in CAFTA-DR nations are being levied with duties of at least 15 percent.
He believes that passage of the trade agreement, which could be decided this week, will bring more of a balance to free trade. Currently, Walden said 99 percent of the imports from Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic arrive in the United States duty-free. Meanwhile, American farmers often face tariffs of 30-60 percent, and sometimes even higher, when shipping products into CAFTA-DR countries. The value of U.S. agricultural exports to these nations in 2002 exceeded $1.2 billion. In return, almost $2 billion was imported into the U.S. by the six countries.
The inequity in the trade agreement, according to Johann, was created more than 20 years ago to help the ailing economies of Central America. Since these countries are all now growing in prosperity, he said many U.S. officials believe it is time for American farmers to also be given a break.
“Ninety-five percent of the world’s population does not live in the U.S., which produces more ag products that it can consume. When you realize that, you begin to see the importance of taking a look at trade opportunities for our farmers,” said Johann. “What we have today is hugely unfair. The CAFTA-DR countries have complete and unlimited access to our markets.”
He continued by saying, “It’s correct these are not wealthy countries, it’s correct they are not sizable countries. But when you put them together, it is a nice market and a growing market.”
According to the National Association of Manufacturers (NAM), 15,625 U.S. companies already export to CAFTA-DR markets. Therefore, the six nations collectively represent the 10th largest importer of American-made goods.
Although the sugar industry, and some others, will have tariffs phased out over time, most fruits will have duties dropped immediately after the enactment of CAFTA-DR. The main opposition that Walden has faced within the 20th Congressional District has arisen from the sugar industry in Malheur County.
Although some of the telephone panel on July 22 worried anew about public health brought by the lack of environmental regulation on imports, Johann said the products were already here. He said CAFTA-DR would allow more inspections by custom agents and stronger enforcement measures for violations.
“It might not be perfect; you may not end up with U.S. standards, but it will force them to put in environmental protections they might never otherwise have,” said Portman.
He said another benefit of CAFTA-DR for American farmers was that foreign competitors could not create regulations just to close markets. For example, he said some countries now “put together” a law to ban our imports that is not supported by sound science. Under the new trade agreement, he said that practice would be prohibited. Portman anticipates that CAFTA-DR will also stop the outsourcing of some jobs, since it would remove the incentive of escaping regulatory oversight and the associated costs.
Livingston approved the concept of CAFTA-DR but urged Walden and the two federal officials to make sure the rules, if adopted, were followed.
“We always seem to have to jump the hurdles, other countries always seem to crawl under them,” she said.
Walden said that scenario could be addressed by the creation of a new trade office that would focus solely on enforcement of all import/export agreements.
“Is CAFTA-DR going to set the world on fire? No. It isn’t the biggest trade agreement but it will help American producers not get shut out of markets,” Walden said. “There’s a very real benefit for ag in a positive way within this district if CAFTA-DR passes and I have to support that.”
The Senate passed CAFTA-DR by a vote of 54-45 in late June. In addition, the House Ways and Means Committee voted 25-16 in favor of the trade agreement. Walden will be called upon to register his affirmation of CAFTA-DR July 26, and anticipates the full House vote to be “very close.”