The American Soybean Association (ASA) told Congress today that the Free Trade Area of the Americas (FTAA) negotiations could have a positive impact on the competitiveness of U.S. soybean farmers and the overall soy industry in Latin American markets. During testimony before the House Agriculture Committee, ASA President Tony Anderson cited the importance of addressing key issues related to market access, biotechnology regulations, export taxes and more during the FTAA negotiations.

“Access to international markets has always been important to U.S. soybean producers,” Anderson said. “Under the FTAA, it will be essential.”

ASA says the United States’ first goal under FTAA should be to eliminate all tariff and non-tariff barriers to full market access. U.S. access to important markets in Latin America is currently restricted by the preferential tariffs and terms granted under the customs unions of Mercosur and the Andean Trade Pact. A “spaghetti bowl” of crisscrossing preferential trade concessions has developed under various regional trading systems in Latin America. ASA called for WTO-consistent policies that will eliminate these bands of price import protections and other trade distorting practices.

The second action that ASA called for is to use the FTAA negotiations as a vehicle to remedy the inconsistent enforcement of intellectual property rights and non-harmonized regulations applied to biotechnology products. For example, U.S. soybean producers are paying a licensing fee of $6 per bag of biotechnology planting seed, while Argentine farmers are not. In addition, Argentine law does not recognize the patents on biotechnology products that are registered in the United States. These inequities have resulted in Argentina’s soybean producers using biotech varieties at one-half the cost faced by U.S. producers.

ASA’s third key point was to eliminate Differential Export Taxes (DETs) during FTAA negotiations. Countries that use DETs place higher taxes on bulk commodity exports in order to encourage domestic processing and export of high-value products. For example, Argentina taxes exports of oilseeds at 3.5 percent while providing tax rebates of between 1.4 and 3.2 percent for exports of soybean oil. Some Brazilian governors are reportedly considering reinstating similar practices.

Anderson concluded his testimony by stating that ASA supports including Chile under NAFTA. He also urged Congress to act quickly to provide the President with Trade Promotion Authority to allow these various negotiations to move forward.