Study: Trade pacts raise U.S. ag exports

Study: Trade pacts raise U.S. ag exports    A comprehensive study found bilateral and multilateral trade agreements directly increase U.S. agricultural exports, farm gate prices and job growth, but warned that the United States risks falling behind more aggressive export competitors.
   'There is a lot of talk about trade right now and this study offers proof that existing trade agreements are working for American agriculture,' said Rebecca Bratter, director of policy for U.S. Wheat Associates, one of the 12 sponsors of the Analysis of the Effects of Trade Agreements on U.S. Agricultural Exports and U.S. Market Development Programs, released this week.
   The study reviewed trade agreements between the United States and other countries and trade agreements independent of the United States.
   Some key findings include:
   ' Under the North American Free Trade Agreement, between 1994 and 2008 the value of U.S. exports of all commodities studied increased more than 300 percent or by more than $12 billion. Wheat exports increased from about $100 million to more than $1 billion, and feed grain export value increased by more than $3 billion.
   ' Under the Uruguay Round Agreement on Agriculture (URAA), the export value of all commodities studied increased. In addition, world grain prices, soybean complex prices, and meat and dairy prices are 4 percent to 18 percent higher under the URAA than they would be without the agreement.
   ' Trade agreements with CAFTA-DR, Chile, Australia, Peru, and Morocco all pushed farm gate prices up, with the exception of soybean meal prices in one of those markets.
   'With export volume increasing almost across the board, it is clear these agreements are creating greater profits and opportunities for U.S. producers,' said Alan Tracy, U.S. Wheat Associates president, in a statement. 'Unfortunately, the study also found that trade agreements between our competitors and other countries are cutting into our sales or threatening our market share.'
   The association noted the pending U.S.-Colombia free trade agreement as an example of potential loss in market share. Colombia is traditionally the largest South American market for U.S. wheat with market share of up to 70 percent. However, U.S. wheat share could easily drop to 30 percent or lower if Canada and the European Union implement their own agreements with the Colombian government allowing their wheat to enter Colombia duty-free.
   'There are currently at least 126 FTAs (foreign trade agreements) under negotiation or in planning stages between nations and regions that do not include the United States,' Bratter said. 'The competition is intensifying and if the United States continues to stand on the sidelines, we are likely to see our hard earned sales erode quickly.'
   The study was conducted by DTB Associates, Allen F. Johnson and Associates, AgRisk Management, Dan Sumner, William Matthews, and Global AgriTrends under the U.S. Department of Agriculture/Foreign Agricultural Service Global Broad-Based Initiative program. An executive summary of the report is available here.