Trade Overview
Without export markets for corn, producer’s income would be significantly lower today. The United States exported 61.8 million metric tons of corn worldwide during marketing year 2007-2008. Japan, Mexico, South Korea, Taiwan, and Egypt currently comprise corn producers’ top five export markets. In addition, the export of value-added corn products, such as meat products, is a priority for our organization. Various corn co-products, such as dried distiller’s grains, represent a growing export opportunity for corn growers.
Trade with Cuba
In 1996, Congress passed the Helms-Burton Act, which restricted United States citizens from doing business in or with Cuba. In 2000, Congress amended the embargo to allow sales of food and medical supplies. In 2005, the Treasury Department reinterpretation of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 put in place restrictions on agricultural trade with Cuba. Also, certain limitations such as end verification and licensing are still in place on the shipment of medical devices. During this past year, President Obama did lift travel restrictions to Cuba somewhat for those with relatives, a small step towards normalizing commerce between the U.S. and Cuba.
Current Requirements for Agricultural Sales:
Currently, the Treasury Department’s Office of Foreign Assets Control (OFAC) has in place regulations regarding payments for agricultural shipments. These rules require that U.S. food sellers receive cash from Cuba in advance before the loading of food shipments to the island. Another significant requirement disallows direct payments from Cuban banks to U.S. financial institutions for agricultural sales. Transactions instead are currently conducted through third-party banks.
Export Background:
While exports of bulk corn and DDGS do not seem to have been affected by the 2005 policy change at the Treasury Department and instead by stocks (see chart below), certainly current restrictions do not facilitate the export of U.S. corn and corn co-products in any way. Importantly, Cuba presents significant market opportunities for corn value-added products such as DDGS and meat.
World Trade Organization
A successful Doha Round is important to the National Corn Growers Association (NCGA). We support the elimination of barriers to free trade and remain committed to the World Trade Organization (WTO) process. The development and maintenance of fair and open global trade practices and policies are essential. On Sept. 18, 2008, NCGA signed a letter from several commodity groups noting the “intractable resistance of many of our trading partners to provide truly significant export opportunities for U.S. agriculture.” We believe any offer to cut domestic support must be weighed against measurable opportunities in market access.
Trade Promotion Authority
NCGA supports reauthorization of Trade Promotion Authority (TPA). Under TPA, the president negotiates agreements that Congress can approve or disapprove but cannot amend or filibuster. TPA ensures that an administration has the necessary tools to negotiate good trade agreements for U.S. agriculture. Fast track negotiating authority is granted to the president by Congress. TPA expired at midnight on July 1, 2007.
Free Trade Agreements
Our corn growers are strong supporters of Free Trade Agreements (FTA). Any bilateral negotiation must assure U.S. corn, value-added corn products, and corn co-products improved access to the market in question.
NCGA supports the Panama, Colombia, and Korea FTAs.
Sanitary and Phytosanitary Issues
Currently, in major corn producing states, farmers plant 80% percent of their acreage to all types of corn biotech hybrids. We support the elimination of trade barriers for agricultural products derived from biotechnology. To this end, we support sanitary and phytosanitary regulations consistent with uniform, science-based, internationally accepted standards.
