Iowa’s farm groups are divided on the Central American Free Trade Act, an international agreement aimed at increasing trade between the US and a handful of smaller nations in this hemisphere. Chris Petersen, a hog farmer near Clear Lake and president of the Iowa Farmers Union, says he was just in Washington a few weeks ago to lobby against it. The national Farmers Union and state chapters are opposed, he says, since they think previous trade agreements like it have not “been beneficial to the people on the bottom of agriculture, which is family farmers.” He gives as an example NAFTA, the North American Free Trade agreement that lowered trade barriers between the US and its neighbors, Mexico and Canada. He says NAFTA’s approval opened up the industry in Iowa to Canadian imports, and the imported hogs “basically destroyed the feeder pig industry in Iowa” within two years. He says the big meatpackers like it, because they can get plenty of low-prices hogs to slaughter and keep prices down for local farmers who want to sell their pigs. “You go to any packing plant in Iowa or Sioux Falls, South Dakota,” advises Petersen. He says on any given day, 30 to 40-percent of the semis parked there are full of Canadian hogs. He says such agreements give foreign producers access to the largest market in the world, but while they sell their products in the US, American producers don’t get such a valuable market expansion in return. And he compares it to the way manufacturing has been exported to countries like Mexico, costing US workers their jobs. It’s not only manufactured goods, he says, pointing out some packers like Smithfield Foods could move to a treaty country and raise hogs “in huge factory farms or whatever.” But in Senate hearings, Iowa Senator Chuck Grassley’s spoken out in favor of CAFTA, saying it would help US exporters. The Iowa Farm Bureau favors the pact, and spokeswoman Mindy Larsen says some have anticipated this for a long time. She says the US is already importing products under the Caribbean Basin Initiative that dates from the 1980s, letting those countries sell 99-percent of their agricultural exports in this country, duty-free. She says what CAFTA will do is “provide equal treatment for our farm exports going into their country.” The Iowa Farm Bureau favors CAFTA and plans to make getting it passed it a priority issue this year. Some commodity groups in Iowa like what they’ve seen of the treaty so far. Paula Chizek is with the Iowa Corn Growers and says the measure supports the group’s position on free trade.The Corn Growers believe you can’t overlook Central America and the Caribbean markets, in part because they’re so close to us. She says they’ve been solid markets in the past and US exporters expect to see continued steady growth. Hog farmers may be able to sell more animals and meat, if the trade barriers are lowered, and Dave Moody, a VP at Iowa Pork Producers, says they favor CAFTA. US pork producers face a tariff as high as 47-percent right now on exports to that area, and he says it would drop to zero within five to fifteen years, depending on which of those countries you’re talking about. They’re shipping products to us now with “basically, zero tariffs on everything,” Moddy says, so the pork producers approve the agreement as a way to grow exports to those countries. ‘It’s pretty much a win-win deal for just about all of agriculture,” he adds. More questions come from labor groups here and in Central America, which say the already weak rules on workers’ rights would be further relaxed under the treaty. CAFTA would include the Dominican Republic as well as Costa Rica, Nicaragua, Guatemala, Honduras, and El Salvador. Economists say their combined economies are smaller than Connecticut, but they buy more US goods than India, Russia and Indonesia combined.
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