WASHINGTON, April 28, 2004 – Agriculture Secretary Ann M. Veneman today updated the House Agriculture Committee on the Bush administration’s trade agenda and the overall prospects for U.S. agricultural trade noting that the forecast for U.S. agricultural exports is at near record levels for fiscal year 2004.
"The importance of exports to American agriculture simply cannot be overstated," Veneman said during a hearing on agricultural trade. "Exports solidly underpin farm income and support almost 900,000 jobs of which 40 percent are in rural areas. Every additional billion dollars in exports supports another 15,000 jobs on farms facilitating trade, in processing and manufacturing, and transporting commodities and food products"
U.S. agricultural exports are expected to reach a near-record $59 billion this fiscal year. This projection is $2.8 billion above FY 2003 export values. The strong export sales are attributed to higher prices and demand, stronger growth in the U.S. and world economies and the lower-valued U.S. dollar.
Veneman identified two markets that merit special attention. "This year, export sales to our North American Free Trade Agreement (NAFTA) partners Canada and Mexico, our number one and number two trading partners, will surpass an unprecedented $17.6 billion--more than double the sales to Japan, once top market for food products," she said.
China’s strong annual growth rate has propelled it to new international trade prominence. "Our sales last year of $3.5 billion to China moved it to our fifth-largest market," Veneman said. "Sales this fiscal year are now forecast to be a record $5.4 billion, triple the amount in 2001 when China joined the World Trade Organization (WTO).
"While China has made great strides in modifying laws and traditions to conform with WTO accession requirements, we continue our vigilance to ensure that China lives up to its commitments," Veneman said. "Recent meetings here in Washington and Beijing have focused on increased cooperation and communication that are essential to facilitating trade and preventing sporadic disruptions."
Agricultural exports for FY 2004 would easily have surpassed the FY 1996 record of $60 billion if not for the disruption of the $3.81 billion beef export market caused by one case of Bovine Spongiform Encephalopathy (BSE) and of the $2.3 billion poultry export market due to an outbreak of Avian Influenza (AI).
Veneman has made re-opening these important markets our top priority. "Our system is based on transparency and sound science. We are continuing to engage our trading partners on a one-by-one basis, to personally assure them of our robust safeguards and to indicate that trade can safely resume," she said. "Mexico and Canada markets have re-opened for more than 90 percent of many beef products. We are making significant progress with Japan and are continuing to work with Korea."
Veneman also updated the Committee on the outlook for key agricultural export markets, including: Canada, as the largest export market, is forecast for the fiscal year at $9.9 billion, up from $9.1 billion last year—a 9 percent increase. The second largest market is Japan, with sales now forecast at $7.8 billion. This number is lower than the $8.8 billion last year due to the halt in our beef sales and interruption of poultry sales. The third-largest market is Mexico, now forecast at $7.7 billion in sales, which is slightly more than last year. However, Mexico is expected to be larger now that it has lifted nearly all of the restrictions on beef, and The fourth-largest market, the European Union, has forecast sales of $6.7 billion up from $6.1 billion last year—a 10 percent increase.