Texas Vegetable Assn. Mid-Year Meeting McAllen, …cnas.tamu.edu/Presentations/CaftaTVA04.pdfTexas...
Transcript of Texas Vegetable Assn. Mid-Year Meeting McAllen, …cnas.tamu.edu/Presentations/CaftaTVA04.pdfTexas...
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Texas Vegetable Assn. Mid-Year Meeting
McAllen, Texas
June 17, 2004
Central America Free Trade:
What’s at Stake For Texas Agriculture?
C NAS Parr Rosson, Professor & Director
Center for North American Studies
Department of Agricultural Economics
Texas A&M University
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What’s At Stake?
Access to Dominican Republic &
Central American Markets
Sources of Raw Materials
Gains/Losses to Trade
Greater Efficiency & Economies of
Scale
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Australia ‘04
Bahrain ‘04 DR-CAFTA
‘04
Chile ‘04 FTAA ‘06
Morocco ‘04
Southern African
Customs Union ‘05
Singapore ‘03
Jordan ‘03
U.S. Trade Agreements-3d Largest Market
NAFTA ‘94 Israel ‘85
CUSTA, ‘89
Andean FTA
05
Panama ‘05
Thailand ‘05
15 Trade Agreements Completed or Pending
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World Average Agricultural Tariffs, 2000
115
85
55
40
30 25
12
0
20
40
60
80
100
120
140 Bound Average
World Average
62%
Percent
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Bound Tariffs for Selected Products, 2000
40 39
52 52
86 86
10 12
Fruit Fresh Fruit Preparations 0
20
40
60
80
100
Percent South America
Central America
Caribbean Islands
North America
Source: ERS/USDA
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Bound Tariffs for Selected Products, 2000
41 38
54 51
86 86
11 12
Vegetables Vegetable Preparations 0
20
40
60
80
100
Percent
South America
Central America
Caribbean Islands
North America
Source: ERS/USDA
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DR-Central American
Free Trade Agreement
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Dominican
Republic,
800 Miles
NE
North
Houston,
1,300 Miles
NW
Mexico
Separate
Agreement with
United States
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CAFTA WHO?
– Costa Rica
– Dominican Republic
– El Salvador
– Guatemala
– Honduras
– Nicaragua
What? Free Trade Area Between Each Country & the United States
When? Early 2005, if Approved
How? Trade Promotion Authority
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CAFTA (cont.)
About ½ of Markets Open to U.S. Agriculture When Implemented
Opportunities: HQ Beef, Cotton, Wheat, Soybeans
Rest of Market Access Over 15-20 Years: Pork, Beef, Poultry, Rice, Corn, Dairy
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DR-CAFTA Demographics
Country Pop.
(mil)
GDP/
Person
Poverty
%
Lit.
%
Ag. Pop.
%
Costa Rica 3.9 $8,300 20.6 96 20
El Salvador 6.5 $4,600 48 80.2 30
Guatemala 13.9 $3,900 75 70.6 50
Honduras 6.7 $2,500 53 76.1 34
Nicaragua 5.1 $2,200 50 67.5 42
Dom. Rep. 8.7 $6,300 25 84.7 17
Total/Avg. 44.8 $4,633 45.3 79.2 32.2
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U.S. Total Trade with CAFTA, 2003
Source: Foreign Trade Statistics, U.S. Census Bureu
$3.4
$1.8
$2.3
$2.8
$0.5
$4.2
$3.4
$2.0
$2.9 $3.3
$0.8
$4.5
$0.1
-$0.2
-$0.7 -$0.5
-$0.3 -$0.2 $0.0
$1.0
$2.0
$3.0
$4.0
$5.0
-$1.0
Billion Dollars
Exports Imports Balance
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U.S.-Central American Agricultural Trade, 1990-2003
$1.3 $1.4
$1.5 $1.6 $1.6
$1.8 $2.0
$2.2 $2.1
$1.9 $2.1
$1.9 $2.0
$2.1
$0.5 $0.6 $0.6
$0.7 $0.8
$0.9 $1.0 $1.0
$1.3 $1.1 $1.1
$1.2 $1.3 $1.3
-$0.8 -$0.8 -$0.9 -$0.9
-$0.8 -$0.9
-$1.0 -$1.2
-$0.8 -$0.8 -$1.0
-$0.7 -$0.7
1990 1995 2000 2003
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
-$0.5
-$1.0
-$1.5
Billion Dollars
Imports Exports Balance
Source: Foreign Agricultural Trade of The United States , Calender Year, USDA/ERS
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U.S. Ag Trade with CAFTA, 2003
Source : Fore ign Trade Statistics, U.S. Census Bureu
$242 $238$349
$200$95
$442
$865
$105
$763
$221$114
$280
-$623
$133
-$414
-$21 -$19
$162
Costa R
ica
El Salvador
Guatem
ala
Honduras
Nicaragua
Dom
inican Rep.
$0
$200
$400
$600
$800
$1000
-$200
-$400
-$600
-$800
Mill ion Dollars
Exports Imports Balance
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U.S. Agricultural Exports to
Central America
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Grains & Feeds
$218
Oilseeds
$90 Animals
$47
Veg/Fruit
$44
Beverages
$37
Other
$47
Grains & Feeds
$582
Oilseeds
$260
Animals
$204 Veg/Fruit
$117
Cotton
$47
Other
$129
Total, 1990: $483 million Total, 2003: $1,339 million
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U.S. Agricultural Imports from
Central America
Bananas
$453 Fruit/Veg.
$133
Fish
$211
Coffee
$372
Sugar
$133
Other
$264
Bananas
$674
Fruit/Veg
$527
Fish
$478
Coffee
$459
Sugar
$188
Other
$328
Total, 1990: $1,566 million Total, 2003: $2,654 million
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
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U.S. Onion and Melon Exports to
CAFTA
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
$0.6
$2.0
$1.5 $1.3
$2.6
$3.9
$1.9
$1.0
$0.4 $0.6
$0.2 $0.0 $0.0
$0.1 $0.0 $0.0 $0.1 $0.0 $0.0 $0.1
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
Million Dollars
Onions Melons
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U.S. Onion and Melon Imports from
CAFTA
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
$1.2 $0.8 $0.8 $0.8 $0.9 $1.1 $0.8 $1.2 $0.8 $1.3
$74.4 $79.0
$85.7
$102.5 $93.9
$106.6
$126.2
$143.0
$161.1
$142.1
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
$0.0
$50.0
$100.0
$150.0
$200.0
Million Dollars
Onions Melons
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Melon Tariff Phase-Out
US Tariffs Eliminated Immediately
Most CA Tariffs Eliminated Immediately
Exception: Dominican Republic May Impose 20% Safeguard Duties
– 5 Years for Watermelon
– 10 Years for Other Melons
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Onion Tariff Phase-Out
US Tariffs Eliminated Immediately
CA Tariffs Eliminated Over 10 to 15
Years
All But El Salvador Have Some Type
of Safeguard or Tariff-Rate Quota
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CAFTA Base Tariffs
for Yellow & White Onions
47
15 15 15 15
97
Costa Rica* El Salvador Guatemala Honduras Nicaragua Dom. Rep.
0
20
40
60
80
100
120 Percent
* Denotes Tariff-Rate Quota
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CAFTA Phase-Out Period
for Yellow & White Onions
15
12
10
15 15 15
Costa Rica El Salvador Guatemala Honduras Nicaragua Dom. Rep. 0
2
4
6
8
10
12
14
16
18 Years
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Monthly U.S. Cantaloupe Shipments and Imports
Source: Agricultural Marketing Service, USDA
0
100
200
300
400 Million Pounds
0
5
10
15
20
25
30 $/CWT
Texas Other U.S. CAFTA Mexico Price
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Monthly U.S. Honeydew Shipments and Imports
Source: Agricultural Marketing Service, USDA
Jan 01
May
Jan 02
May
May
Jan 04
0
20
40
60
80
100Million Pounds
0
5
10
15
20$ per 2/3 Carton of 6s
Texas Other US CAFTA Mexico Price
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Monthly U.S. Watermelon Shipments and Imports
Source: Agricultural Marketing Service, USDA
Jan 01
May 01
Jan 02
May 02
Jan 03
May 03
Jan 04
0
200
400
600
800Million Pounds
0
0.1
0.2
0.3
0.4
0.5Cents/Pound, Various Red
Texas Other U.S. CAFTA Mexico Prices
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Monthly U.S. Onion Shipments and Imports
Source: Agricultural Marketing Service, USDA
0
100
200
300
400
500 Million Pounds
0
10
20
30
40
50 $/CWT
Other U.S. Texas Mexico CAFTA Other Imports Price
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Shipping Trends CAFTA Poses
Biggest Threat to Texas Cantaloupe & Honeydew
Other US Bigger Threat in Some Years
Mexico Beneficiary of Higher Prices for Onions & Cantaloupe
Texas Benefits from Higher Prices for Cantaloupe, Watermelon & Onions
Declining Shipments from Texas
Texas Shipments
97.3
52.3
423.2
80.8
35.1
343.3
56.0
34.6
279.3
Cantaloupe
Honeydew
Onions
0.0 100.0 200.0 300.0 400.0 500.0
2001 2002 2003
-42.5%
-33.8%
-34%
Million Pounds
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Summary
Negotiations Completed – DR-CAFTA May Go To Congress Soon
– Labor & Environmental Interests Important to the Debate
DR-CAFTA Tariff Reductions Will Open Markets, Over Time
Dr-CAFTA Major Supplier of Honeydew and Cantaloupe to U.S. Market
– Texas Season Overlaps with Rest of United States & DR-CAFTA
Mexico & Other US Major Competition in Watermelon & Onions
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Issues for Texas
Are More Trade Agreements a Desirable Outcome?
Without DR-CAFTA, U.S. Market Access Limited
– Even with DR-CAFTA, No Guarantee of Market
Growth, Some Countries Need Economic
Development & Income Growth
Investment in CA May Spur Production &
Development of Infrastructure
SPS Problems May Arise, More Trade Disputes
Likely
Recent Declines in Shipments of Texas Cantaloupe,
Honeydew & Onions Troublesome
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Center for North American Studies
Parr Rosson
Ph: 979-845-3070
E-mail: [email protected]
“Informed Decisions for Global
Change”
C NAS