The U.S. Senate last night approved an historic trade agreement between the United States, the Dominican Republic, and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Commonly referred to as CAFTA-DR, the deal would benefit U.S. agriculture in general and soybean producers in particular. Economists estimate the deal could boost U.S. agricultural exports by $1.5 billion when fully implemented.

"Senate passage of CAFTA-DR is great news for U.S. soybean farmers," proclaimed ASA President Neal Bredehoeft from his farm in Alma, Mo. "CAFTA-DR would solidify our position as the preferred supplier of soybeans and soybean products to these nations, and I thank those Senators that supported the deal."

CAFTA-DR would immediately eliminate tariffs on all soybeans and soybean products with the exception of refined soybean oil, where the tariff will be phased out over 15 years in equal annual cuts. CAFTA-DR countries are already a large and loyal market for U.S. soybean exports. The six CAFTA-DR countries represent a growing region of 45 million people that imported $264 million in U.S. soy product during 2004.

"CAFTA-DR will help protect this important market for U.S. soybean farmers by reducing existing tariffs. South American soybean farmers are aggressively trying to take this ‘backyard’ market away from us. This agreement will give U.S. soy a tariff preference, helping to ensure that U.S. farmers continue to supply this market," said Bredehoeft.

CAFTA-DR will also benefit U.S. livestock and poultry producers. The agreement provides the U.S. with sizeable quotas for exporting pork duty-free. These quotas will increase each year until they are eliminated in year 15. In addition, significant sanitary and technical issues are being resolved. Likewise, tariffs and quotas on imports of U.S. poultry products will be eliminated over the term of the agreement. Tariffs on certain sensitive products will have a 15-year phase-out period with a growing in-tariff quota, while others will be eliminated immediately.

"CAFTA-DR benefits to the U.S. livestock and poultry industries are huge. And as our largest domestic customers, this bodes well for U.S. soybean farmers," added Bredehoeft, who also raises hogs.

The U.S. House Ways and Means Committee voted in favor of CAFTA-DR yesterday. Now the fate of the agreement rests in the full U.S. House of Representatives, which is expected to consider CAFTA-DR once it returns from the July 4th recess.

"Soybean farmers should call their Representatives and urge them to support CAFTA-DR. Tell them how important this agreement is to soybean farmers in their districts," concluded Bredehoeft.