National Milk Producers Federation

Release Date: April 11, 2005

WASHINGTON, DC – U.S. dairy industry leaders joined with representatives of several other agricultural organizations Monday to voice support for the proposed Free Trade Agreement with Central America and the Dominican Republic (CAFTA-DR), which Congress is expected to vote on later this year.

The high-profile event in downtown Washington featured Secretary of Agriculture Mike Johanns and Ambassador Allen Johnson from the U.S. Trade Representative's Office, along with Charles Beckendorf, Chairman of the National Milk Producers Federation, and Jerry Kozak, President and CEO of NMPF. Several dairy producers from NMPF's member cooperatives also turned out to advocate passage of CAFTA-DR.

The Administration officials touted the expected benefits that the FTA holds for the U.S. agriculture community, and urged Congressional passage of the agreement. Total agricultural exports to the five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua), along with the Dominican Republic could grow by $1.5 billion upon full implementation of the agreement, according to an analysis by the American Farm Bureau Federation.

The agreement also would open up opportunities for U.S dairy exports in a region with expanding economies and growing populations that are building demand for dairy products much faster than the small dairy sectors in those nations can supply. CAFTA-DR offers immediate access for new quantities of U.S. dairy exports into the region, with all tariffs on U.S. dairy exports eventually phasing down to zero.

According to NMPF, the U.S. dairy sector already has a slight competitive advantage in Central America due to the United States' proximity to these countries. Now, the industry stands to gain a larger advantage over foreign competitors through preferential quotas and lower tariffs.

“The CAFTA-DR will give us a good opportunity to make strides towards bal041105ancing out the tide of imports that we face by opening up new avenues for outflows of U.S. dairy products,” said Beckendorf, Chairman of NMPF. Beckendorf said NMPF has generally supported trade agreements that will result in a net positive impact for producers, and that this agreement will help in part offset the increased dairy imports that will result from last year's free trade agreement with Australia that NMPF opposed.

“This is a good opportunity for U.S. dairy producers to expand exports, while not facing an increase in imports from Latin America,” said Kozak. “In fact, it is exactly the sort of trade agreement that this administration should be pursuing – one in which the dairy industry, as well as many other U.S. industries, expects to gain.”

Dairy exports to this growing market totaled $80 million last year. NMPF has calculated that the FTA would result in increased income for dairy producers of approximately $100 million over the first decade of the agreement's implementation. Given this net benefit to the U.S. dairy industry, NMPF urged Congress to pass CAFTA-DR without delay.