AFBF support of trade agreement in doubt

The American Farm Bureau Federation says it would be difficult for the organization to support a free-trade agreement with the Dominican Republic due to that nation’s passage of a 25 percent tax on soft drinks containing high fructose corn sweetener.

In a letter to U.S. Trade Ambassador Robert Zoellick, AFBF said it was “disappointed” and “deeply concerned” about the impact this new tax may have on U.S. corn producers and the export of HFCS to the Dominican Republic.

According to AFBF President Bob Stallman, AFBF supports the Dominican Republic-Central America Free Trade Agreement, but due to the new tax, the organization’s support of an FTA package including that nation would be “difficult.”

Stallman explained that under terms of the U.S.-Dominican Republic FTA, U.S. exports of HFCS already would not receive duty-free access to that market until the 15th year of the agreement. In addition they also are covered by a safeguard provision put in place by the Dominican Republic.

“By placing a tax on top of those provisions, the Dominican Republic has jeopardized a free-trade agreement our negotiators worked hard to secure,” Stallman said. “This new tax not only violates the Dominican Republic’s obligations under the WTO but also undercuts the principles of the FTA and calls into question that nation’s willingness to comply with the terms of the agreement.”

Stallman told Zoellick it is “unfortunate” that the Dominican Republic has erected this artificial barrier to trade.

“Much work has been done to achieve a balanced agreement with the Dominican Republic,” Stallman said. “But, unless the Dominican Republic’s 25 percent tax on soft drinks containing HFCS is removed, AFBF will not be able to support the U.S.-Dominican FTA.”

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