“The successful negotiation of a Central American Free Trade Agreement (CAF...
“The successful negotiation of a Central American Free Trade Agreement (CAFTA) announced today by the office of the U.S. Trade Representative (USTR) is a major achievement which will benefit the U.S. red meat industry by winning greater access for its products to markets with a potential for future export growth,” USMEF President & CEO Philip Seng commented on hearing the announcement of the establishment of CAFTA.
“CAFTA is now a reality thanks to the diligent efforts of our negotiators at the Office of the U.S. Trade Representative (USTR). Import duties on both U.S. beef and U.S. pork will be phased out completely over the next 15 years,” Seng added. “The agreement will offer immediate access for high-quality U.S. beef exports into Nicaragua, Honduras, El Salvador and Guatemala and all tariffs on U.S. beef will be gone by 2019.
“The National Cattlemen's Beef Association (NCBA), the National Pork Producers Council (NPPC) and the U.S. Meat Export Federation (USMEF) asked the U.S. government to ensure that CAFTA would mean free trade for the U.S. red meat industry and this agreement delivers what we asked for.”
U.S. Prime and Choice beef cuts will immediately be exempt from both tariffs and quotas. Exports of all other beef products to Nicaragua, Honduras and El Salvador will see tariffs reduced to zero over the next 15 years, while Guatemalan tariffs will be phased out over the next 10 years. U.S. beef exports to all four Central American countries will not be bound to quotas.
The new free trade zone will establish import quotas for U.S. pork products going to Nicaragua, Honduras, El Salvador and Guatemala, but will phase out the tariffs on these products and the quotas themselves over the next 15 years. Each country will have a separate quota for pork imports:
Guatemala 3,950 metric tons (mt), increasing 5 percent per year
Honduras 2,000 mt, increasing 7.5 percent per year
El Salvador 1,500 mt, increasing 10 percent per year
Nicaragua 1,000 mt, increasing 10 percent per year
Costa Rica is not part of the initial CAFTA grouping, but the U.S. government hopes that continuing negotiations will succeed in overcoming outstanding differences.
“The real significance of this agreement,” commented USMEF Vice President, Western Hemisphere Homero Recio, “is that it sets the tone for how future agreements will deal with U.S. red meat products. A precedent has been set for future bilateral agreements and a future Free Trade Area of the Americas agreement.”
Recio expressed his hope that proposed free trade agreement talks with the Dominican Republic will offer even better terms to the U.S. beef and pork industries. “Although the countries of Central America are not in the first rank of U.S. beef and pork export markets, tourism and the restaurant industry are recovering from the aftermath of the September 11 terrorist attack on New York, and retail shopping is also expanding. The current value of the dollar will also benefit our export industry.”
The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn, sorghum and soybean checkoff programs.
— USMEF —