Agricultural Trade Issues in the 108th Congress


 

Publication Date: April 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

Type:

Abstract:

Agricultural exports contribute to the prosperity of the U.S. agricultural economy. Their value is projected at $57 billion for FY2003, and they are expected to grow over the long term. These exports are the equivalent of about a quarter of the gross income of U.S. farmers and generate both farm and nonfarm employment. U.S. agricultural imports, expected to reach $43 billion in FY2003, are fostered by low average U.S. tariffs, the relative strength of the U.S. dollar, and consumer tastes and preferences for high value food products, the largest component of imports. A large share of agricultural imports compete against U.S. products, but they also generate economic activity in the U.S. economy.

Although many world economic and other factors influence exports, many farm groups believe that U.S. agriculture’s future prosperity also depends on such U.S. trade policies as 1) negotiating improved market access for U.S. products bilaterally, regionally, and multilaterally; 2) assuring market access and consumer acceptance at home and abroad for products of agricultural biotechnology; 3) assuring that China adheres to its World Trade Organization (WTO) agricultural market access commitments; and 4) resolving contentious commodity trade disputes. Some farm groups, mainly producers of import-sensitive commodities, question opening U.S. markets to foreign competition. Agricultural trade issues that are being or could be considered during the 108th Congress include:

Free trade agreements (FTAs) with Chile and Singapore, which Congress will take up according to expedited or fast track procedures in the Trade Act of 2002 (P.L. 107-210). The 2002 Trade Act also requires congressional-executive branch consultation on trade negotiations, which currently include negotiation of FTAs with 12 other countries or regional groups, negotiations with 34 western hemisphere countries for the Free Trade Area of the Americas (FTAA), and multilateral trade negotiations in the WTO.

Biotechnology regulations in other countries, especially in the EU, which will affect U.S. commodity exports.

China’s implementation of its WTO market opening commitments for agriculture, which has been slow and uncertain, and has failed to meet expectations of U.S. agricultural exporters.

Country-of-origin labeling for meats, fresh produce, seafood and peanuts, established by the 2002 farm bill, but whose implementation has raised questions about benefits versus compliance costs.

Other trade issues of interest to the 108th Congress include commodity trade disputes over cotton, wheat, meat and poultry, and sweeteners; the scope of restrictions that should apply to agricultural sales to Cuba; and funding for U.S. agricultural export and food aid programs.

This report will be updated.