The Foreign Service Journal, May 2003

sweet corn, walnuts, and animal fats, go overseas. These numbers are not just dry statistics. When Taiwan suspended imports of U.S. apples because of pest concerns in late 2002, lower demand pushed prices for apples on the West Coast down, causing major financial problems for some growers. The problem became important enough to involve the governor and Washington state’s congressional delegation. Farms are not the only beneficiaries of agricultural trade. Agricultural exports also benefit the packaging, shipping and financing sectors of the U.S. economy. Agricultural exports, expected to reach $57 billion in 2003, will generate an additional $80 billion in supporting busi- ness activities and provide employment for 765,000 Americans. In response, while FAS still carries out its “traditional” functions (such as reporting on local agricultural condi- tions), its activities increasingly focus on trade policy, export promotion, food aid, export credits and interna- tional cooperation programs. But this shift in focus is real- ly nothing new: ever since its establishment in 1953, the agency has continually reinvented itself in recognition that both American and world agriculture have changed and globalized; information and communications technology have changed the way U.S. exporters do business around the world; and that the international trading system has expanded and evolved. Pursuing Trade Agreements The increasing importance of foreign markets to U.S. agriculture has driven a major expansion of FAS’s trade policy role. To secure markets for our agricultural prod- ucts, the U.S. government has aggressively pursued trade negotia- tions wherever possible. Over the past decade, Washington has signed more than 10 trade agreements with major implications for agriculture. The most significant of these are: • The Uruguay Round, which resulted in the creation of the World Trade Organization on Jan. 1, 1995. This was the first multilateral trade round to deal with agriculture comprehensively. The Uruguay Round agree- ments resulted in lower tariffs, reduced export subsidies, disciplines on certain kinds of farm support, and the con- versions of bans and quotas to tariff rate quotas that allow the entry of a quantity of products at a lower duty. • The North American Free Trade Agreement, which was implemented in January 1994 to establish free trade rules among Canada, Mexico and the United States. The agreement phases out most trade restrictions within 15 years. Partially because of NAFTA, U.S. exports to Canada and Mexico now exceed those to Japan and the European Union combined. In 2002, American exports to Canada exceeded those to Japan. These and other agreements have opened markets, reduced unfair competition, brought some discipline to quarantine barriers, and introduced more effective dis- pute-settlement procedures in global trade. As a result, USDA estimates that trade liberalization has increased exports by $3.5 billion a year since 1985. The U.S. is hoping to deepen liberalization through the ongoing Doha Round and negotiations for a Free Trade Area of the Americas, along with free trade agreements with Southern Africa, Central America, Chile, Singapore and Australia. FAS works closely with the State Department and the U.S. Trade Representative to advance those initiatives. At the same time, U.S. trade faces threats from region- al trade agreements that exclude the United States. There are today more than 130 preferential trade agreements around the world, of which the United States is a party to only three. E.U. expansion into Eastern Europe poses a particular threat, both by shutting us out of markets in Poland, Hungary, Romania, and Bulgaria and by encour- aging them to overproduce through high subsidies. This overproduction can cut U.S. market share in third coun- tries and lower prices for U.S. farmers. F O C U S M A Y 2 0 0 3 / F O R E I G N S E R V I C E J O U R N A L 45 Agricultural exports also benefit the packaging, shipping and financing sectors of the U.S. economy. Eric Trachtenberg is currently deputy chief of the agri- cultural affairs section at the American Institute in Taiwan. He joined FAS in 1995 and worked in Washington, D.C., covering trade policy in one assign- ment and forest products in the other. From 1998 to 2001, he served in the Office of Agricultural Affairs at Embassy Moscow. Prior to entering the Foreign Service, he worked in the House of Representatives, for the Environmental Protection Agency and on the Taiwan Stock Market.