Trade priority as sales share erodes

The Bush administration is working to promote U.S. agriculture in a changing world trade environment that threatens to erode U.S. market share, according to a U.S. Department of Agriculture official who spoke at the recent U.S. Grains Council's Third International Value-Enhanced Grains Conference in Portland, Ore.

Mattie Sharpless, acting administrator of USDA's Foreign Agricultural Service, said the enactment of Trade Promotion Authority (TPA) is at the top of President Bush's trade legislation agenda because it is essential to U.S. trade policy initiatives.

“With TPA we can enter into agreements to eliminate trade barriers and roll-back trade distorting subsidies,” she said. “Without it, other countries will write the future rules of trade — rules the United States will have to abide by.”

Sharpless noted that delay of TPA renewal is costing U.S. grain growers market share. Of 130 preferential trade agreements in force around the world, the United States is a party to only two, she said. “While the United States has been waiting for TPA renewal, Canada has negotiated a free-trade agreement with Chile,” she said. “Canada is now taking market share from us in wheat because they have lower tariffs in Chile than we do.”

The composition of U.S. agricultural trade has shifted substantially in the last 15 years, Sharpless said. In 1985, when several of the current U.S. export programs were introduced, U.S. agricultural export sales were $31 billion. Bulk products made up 64 percent of that, while consumer-oriented, high-value products contributed only 15 percent. Last year, U.S. agricultural exports reached nearly $51 billion. Consumer-oriented products accounted for 42 percent of that.

Market share drops

“Twenty years ago, the United States was the world leader in agricultural exports, accounting for 24 percent of world trade,” Sharpless said. “Today, that share has eroded to 18 percent. Even though our exports have risen substantially, they are doing so at a slower rate than that of other exporters.”

Changing consumer demands are challenging marketing institutions, Sharpless said. “The forward-looking nature of this conference, with its emphasis on value-added grain products, can greatly benefit producers, processors and buyers.”

Sharpless told conference participants that, despite trade friction between the United States and the European Union, USDA considers use of biotechnology as an important facet in agriculture's continuing quest for improving crop varieties and preserving the environment.

“Biotechnology can protect crops from specific pests and diseases, heighten plant tolerance to environmentally safer herbicides, improve plant adaptability to harsh growing conditions and boost crop yields,” she said.

She said USDA's Animal and Plant Health Inspection Service and the Food and Drug Administration will continue to work to ensure that biotech crops and foods produced from them are as safe to consume as conventional foods.

Free Trade talks

Sharpless also said that the Bush administration is working on negotiations on the Free Trade Area of the Americas, the natural extension of the North America Free Trade Agreement. FTAA will provide U.S. producers and exporters greater access to an additional 450 million consumers, she said.

Sharpless applauded China's impending entry into the World Trade Organization. “China's accession to the WTO will dramatically cut import barriers and give U.S. goods unprecedented access to one of the world's largest and fastest-growing economies,” she said.

China's accession to the WTO could add $2 billion annually to U.S. exports of grains, oilseeds, cotton, poultry, pork and other agricultural and forest products, she said.

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