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Unilateral Trade Policies andSouthern Agriculture
Presentation at SAEA Organized Symposium:
The Impacts U.S. Trade Policieson Southern Agriculture
Lynn Kennedy and Flynn Adcock Center for North American Studies
Louisiana State University and Texas Agrilife Research
Prepared for the SAEA Annual MeetingsDallas, TX February 4, 2008
Overview
History of U.S. Trade Sanctions
Impacts of Trade Sanctions on Agriculture
The Case of Cuba – Economic Impacts
Summary and Implications
History of U.S. Trade Sanctions The U.S. has imposed trade sanctions on numerous
countries for various stated reasons since 1950 North Korea – War, Nuclear Weapons Vietnam – War, MIA Issues Cuba – Communist Takeover, African Involvement Libya – Support of Terrorism, Pan Am 103 USSR – Invasion of Afghanistan Iran – Support of Terrorism, Suspected WMDs Sudan – Civil War, Human Rights, Terrorism Iraq – Invasion of Kuwait, Suspected WMDs
Each time, important markets lost, especially Cuba, and especially for rice, wheat, and other grains
Now trading with, or at least exporting to, most, but lost market share over the years
Agricultural Imports for Countries Targeted by U.S. Sanctions, 2006
Agricultural
ImportsImports from
U.S.Percent from
U.S.
Million Dollars
Cuba $1,039 $328.2 31.6%
Vietnam $3,464 $216.0 6.2%
Sudan $1,147 $71.6 6.2%
Iran $5,110 $5.1 0.1%
Libya $1,216 $33.8 2.8%
Source: www.wto.org, www.fas.usda.gov/ustrade, and www.usitc.gov
Selected Ag Imports for CountriesTargeted by U.S. Sanctions, 2005
Source: US Trade Intenet System, www.fas.usda.gov/ustrade and Food and Agricultural Organization of the UN, www.fao.org
$396 $389 $377
$79 $79$55 $47 $40 $37 $29 $24
Iran SBO
Iran Rice
Iran Corn
Libya Wheat
Iran SBM
No Korea Rice
Libya Corn
No Korea Corn
Vietnam Corn
Libya SBM
No Korea SBO
$0
$100
$200
$300
$400
$500
Million Dollars
U.S. Had No Exports of these Products to these Markets during 2005;None or Negligible Most Years
Selected Ag Imports to Cuba , 2006
Source: U.S. Trade Intenet System, www.fas.usda.gov/ustrade and www.usitc.gov
$144$136
$60 $58$51
$32
Meat
Wheat
CornForestry
RiceSoybeans
$0
$20
$40
$60
$80
$100
$120
$140
$160
Million Dollars
Other U.S.
U.S. Agricultural and Related ProductsExports to Cuba, 2002 - November 2007
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
$139.8
$248.4
$388.7
$351.4$328.2
$371.1
2002 2003 2004 2005 2006 Jan-Nov 07$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
$400.0
$450.0Million Dollars
Likely New
Record in 2007
Southern U.S. Agricultural Exports to Cuba, Major Products, 2006
Source: U.S. Trade Intenet System, www.fas.usda.gov/ustrade
$26.3
$9.7$8.7 $8.3
$6.7$5.6
$4.5 $4.3 $3.9$2.9 $2.9 $2.3 $1.9 $1.3
$0.4
AR TX NC MS
GA LA AL KY OK VA TN SC MD
FL WV
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
Million Dollars
$89.4 Million Total31.8% of U.S. Total
Products included are Grains, Soybeans, Soybean Products, Poultry
Meat, Pork, Beef, Seeds, Cotton, Animal Fats, & Wood Products
Composition of Southern U.S. Exports to Cuba, 2006
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Grains$38,279
Poultry Meat$30,219Soybeans & Products
$10,573
Wood Products$6,056
Other Meats$2,814
Other$1,430
Thousand Dollars
$89.4 Million Total
Economic Impacts of Southern U.S. Exports to Cuba, 2006
Business Activity Income Employment
(Million Dollars) (Jobs)
Direct $89.4 $27.8 1,332
Indirect & Induced
$104.0 $48.9 669
Total $193.4 $76.7 2,001
Source: Center for North American Studies, using IMPLAN Input/Output Model
Byrd Amendment/Crawfish The Byrd Amendment directed the U.S. Bureau of
Customs and Border Protection to distribute monies to companies that petitioned or supported antidumping and countervailing duty actions.
In the case of the U.S. crawfish industry, companies that did not petition or support antidumping actions against Chinese crawfish imports were not included in a $7.5 million payout by Customs as a result of a 1997 antidumping order on crawfish tailmeat imports from China.
Byrd Amendment/Crawfish
Crawfish Processor Information: 2000-2004
2000 2001 2002 2003 2004
Number of Firms 24 23 29 28 27
Total Pounds 269,381 665,232 1,711,985 2,056,336 1,697,270
Pounds/Firm 11,224 28,923 59,034 73,441 62,862
Top 3 Processor Share 0.42 0.57 0.47 0.38 0.32
Top 5 Processor Share 0.61 0.71 0.60 0.52 0.49
Herfindahl Index 0.10 0.18 0.12 0.08 0.07
Summary and ConclusionsMany Times Agriculture Has Borne
Disproportionate Share of the BurdenSanctions Are Disruptive, May Harm US
Producers & Likely Ineffective if UnilateralSouthern Rice, Corn, Wheat, Meats Harmed
by SanctionsUS Ag Export Growth to Cuba Impressive-
Likely Politically MotivatedEconomic Impacts to Southern U.S. is
Substantial
Implications
As Sanctions are Lifted, There is an Educational Role to Inform
Important to Be Objective, Staying Out of the Political Fray
Staying Out of the Process may Cost Producers in some Cases (Byrd/Crawfish)
Geopolitical Considerations Always Trump Agricultural Interests