010564 USDA Pushes for Free Trade Deal

Washington - The Bush administration sought to sell skeptical farm-state lawmakers on a free trade agreement for the Western Hemisphere, predicting the deal would boost U.S. agricultural exports by $1.5 billion a year.

That's nearly three times as much growth as the Clinton administration had estimated from the proposed free-trade zone. Imports would grow an estimated $1 billion, Agriculture Department economists said.

“From the agricultural perspective, the United States has much to gain,” Agriculture Secretary Ann Veneman told the House Agriculture Committee.

The agreement would increase U.S. exports in the Western Hemisphere by about 9% a year, she said.

Department officials said the new estimates are preliminary and based on a revision of a previous study done in 1998. U.S. farm exports are expected to total $53 billion this year.

Most of the benefits to U.S. farmers from the trade deal would go to wheat and grains such as corn that are used for animal feed, Veneman said.

The administration hopes to finish negotiations on the agreement before 2005 but needs fast-track trade negotiating authority from Congress in order to do it, said U.S. Trade Representative Bob Zoellick.

Without such authority, Congress could make changes in any agreement that the administration works out. Brazil and other countries are reluctant to negotiate sensitive issues if they know Congress could alter the deal, Zoellick told the House panel.

But lawmakers said farm support for new trade agreements is waning because some producers think they have been hurt by existing deals, including those with Mexico and Canada.

“The support is narrowing and it is becoming more concerning,” said the House committee chairman, Rep. Larry Combest (R-TX). “The frustrations are real and they touch a lot of different sectors of the ag economy.”

Rep. John Thune (R-SD) added, “If you polled producers in our state you'd get a very mixed bag.”

In addition to wheat and corn, exports of soybeans and cotton would also rise under the hemispheric while there would be little impact on rice, meat and dairy products, according to an analysis by the Congressional Research Service.

Sugar, peanut and orange growers could be hurt because they would face more competition from imports in South and Central America, the study found.

Sugar growers, who want to be left out of the negotiations, are trying to preserve a government support system that props up U.S. prices by limiting imports of cheaper foreign sugar.

“The U.S. sugar market does not require additional foreign sugar, through the ... (proposed agreement) or any other trade negotiation,” said Jack Roney, an economist for the American Sugar Alliance, a growers group.

Cattle producers do not want any part of the proposed trade deal either.

“Access to the U.S. beef market is already relatively unrestricted and there is a perception throughout the U.S. industry that we have granted more access than we have gained during past negotiations,” said Wythe Willey, president-elect of the National Cattlemen's Beef Association.

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