Implications for U.S. agriculture in not-yet-ratified FTAs are discussed in a USDA Economic Research Service report just out. NAFTA is the one that first comes to mind whenever most hear the acronym “FTA” (Free Trade Agreement). But since 2001, the U.S. has concluded negotiations with 13 different countries, producing eight free trade agreements. Three more have been negotiated, but not yet ratified by Congress. Other countries have become increasingly active negotiating their own trade pacts and those have raised concerns among U.S. exporters that it could erode U.S. market share over time (see next item).
This particular ERS study estimates that U.S. ag exports to South Korea could jump by $1.9 billion per year if ratified. It puts the boost to U.S. ag exports at $370 million if the FTA with Columbia is ratified; an extra $50 million in ag exports under the proposed pact with Panama. And while FTA critics note that such agreements often cost U.S. ag trade in other areas, the ERS report shows new trade created exceeding any trade diverted. But it does confirm the amount of net gain for ag trade varies by the specific circumstances of each agreement.
“Reciprocal” Trade Agreements (RTAs) a different animal: In a separate ERS report just issued, authors look specifically at the proliferation of bilateral and regional trade agreements since 1995 often termed “reciprocal” trade agreements. Results show that while increasing ag trade between the signatory countries, RTAs tend to decrease ag trade between member and non-member countries. It also shows RTAs to be particularly effective at expanding trade and opening new markets in developing countries when those countries’ trading partners are part of the same agreement.
Administration still gung-ho on biofuels, … but shifting away from ethanol? Roger Beachy, Director of USDA’s National Institute of Food and Agriculture (NIFA) announced a wide array of new grants to fund biofuel research projects. Said to be a highly competitive selection process among projects submitted, it’s noteworthy that the funded projects focus on three specific areas: Crop protection for sustainable feedstock production systems, enhanced co-product development, and carbon sequestration & sustainable bioenergy production.
It’s another hint of a shift from corn-based ethanol in government-funded research that out of dozens of funded projects among 25 states, USDA chose to highlight these:
• Three California projects to determine feasibility and sustainability of using poplar trees, switchgrass or sugarcane as biomass feedstocks.
• Three Michigan projects focused on 1) the environmental impact of biomass feedstock production, 2) pest control in perennial grasses usable as feedstocks, and 3) a cost-effective fermentation process to increase the sustainability of biodiesel production.
• Four South Dakota projects to 1) design an “ecologically optimized feedstock production system, 2) activation technologies for producing activated carbon from biochar, 3) producing high levels of commercially available polysaccharide gums from prairie cordgrass and 4) developing research tools for advanced biofuels production using lignocellulosic biomass (such as wheat straw, cornstalks, etc.)
For a complete list of all funded projects, go to www.doane.com. The final outline of USDA’s animal identification program could be rolled out this month. USDA was expected to fund the voluntary program, but current budget proposals could cut funding, which would shift the burden to the states. Even if there is some funding, federal dollars to be committed to the program are likely to be less than requested by USDA. The final rule’s release will be followed by a comment period, which could be extended beyond the typical 60-day window.