The U.S. Grains Council (USGC), in partnership with the National Grain Sorghum Producers (NGSP) and National Corn Growers Association (NCGA), applaud the successful negotiations of a free trade agreement (FTA) with the Dominican Republic. Through these negotiations, the U.S feed grain industry locks in zero tariffs immediately for corn, sorghum, barley and malt, as well as many related products.
Of those commodities, sorghum is gaining the most. Duties will drop from 8 percent to zero due to the agreement once it is approved by Congress. At present, the United States is enjoying zero duty on corn, barley and barley malt.
“The Caribbean Basin holds tremendous opportunities for U.S. grains, including sorghum,” said Dale Artho, NGSP vice president for foreign market development, Wildorado, Texas. “We look forward to establishing new food and feed grain opportunities there.”
By reaching this agreement, the Dominican Republic will now be integrated into the Central American Free Trade Agreement (CAFTA), U.S. Trade Representative Robert B. Zoellick stated. The agreement expands the benefits of the CAFTA to all seven countries — the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.
“By adding the Dominican Republic to CAFTA, the U.S. will have duty-free access to the six Central American countries for more than 2.6 million metric tons of corn immediately upon implementation of the agreement,” said Terry Wolf, USGC chairman.
Second largest market
“In total, that makes for the second largest feed grain market in Latin America behind Mexico. We are very pleased with the outcome of this agreement as it addresses all the commodities that the U.S. Grains Council represents.”
The Dominican Republic in recent years has become an important market for U.S. feed grains as imports of U.S. corn have grown to more than 1 million metric tons annually. The U.S. currently has a 100 percent share of that market, and the FTA ensures that at no time will any other competitor have a tariff advantage over the United States.
“Because the Dominican Republic already is applying zero duties to imports of most feed grains, it is unlikely that an FTA would have a major immediate impact on Dominican Republic demand,” Wolf continued. “However, binding those tariff rates will ensure future U.S. feed grain imports are available to the developing livestock industries at commercial costs. And, the eventual opening of the Dominican Republic market to meat, poultry and dairy products will enhance U.S. exports of those products as well.”
Duty-free access under tariff-rate quotas will be established for U.S. beef, pork, poultry and dairy products. The two countries have agreed to work to resolve sanitary and phytosanitary barriers to agricultural trade, in particular, problems and delays in food inspection procedures for meat and poultry.