For what it's worth
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CAFTA Ratification Would Expand U.S. Red Meat Access In Costa Rica
The Central America Free Trade Agreement (CAFTA) 
has increased access and decreased tariffs for 
U.S. products in several Central American 
countries. In Costa Rica, however, there has been 
debate whether implementing CAFTA is in the best 
interest of local producers and businesses.
Some Costa Ricans fear providing duty-free access 
to large U.S. companies will run local owners out 
of business. So, the ratification and 
implementation of CAFTA in Costa Rica will be up 
to voters to decide on Oct. 7 in a referendum election.
U.S. Meat Export Federation (USMEF) Director, 
Central & South America and Global Strategic 
Coordination Ricardo Vernazza-Paganini expects 
CAFTA to be ratified, which would increase access 
for U.S. beef and pork products to this growing market.
For beef, all U.S. inspected plants will be 
approved to export Costa Rica, replacing the 
current system of plant inspections done by 
veterinarians from Costa Rica. Under CAFTA, U.S. 
beef muscle meat graded as prime or choice will 
have duty free access, replacing the current 18 percent duty.
“The beef muscle market is waiting to be 
developed,†said Vernazza-Paganini. “The economy 
in Costa Rica is growing and there are many 
expatriates living there who are loyal to U.S. 
products. Plus, many consumers are simply not 
aware of U.S. beef’s high quality.â€
Costa Rica produces more beef than it consumes, 
but its beef is from the Cebu breed of cattle 
slaughtered at more than 30 months of age, which 
produces a tougher product. U.S. beef has an 
advantage since it is grain fed and comes from younger cattle.
“This is an area where USMEF educational efforts 
will inform consumers of the superior advantages 
of U.S. beef,†said Vernazza-Paganini. “Through 
marketing campaigns and complimentary beef 
samples, we want consumers to recognize U.S. 
beef’s difference so they can make informed purchasing decisions.â€
The beef variety meat import market in Costa Rica 
is approximately 1,000 metric tons (mt) per year 
and Nicaragua currently has nearly 40 percent of 
the import market share. With U.S. beef variety 
meat entering Costa Rica duty free under CAFTA, 
the United States will have a good opportunity to 
displace Nicaragua as a main supplier of variety 
meat due to price competitiveness.
A sizable amount of pork imported by Costa Rica 
is for processing. Under CAFTA, the United States 
will have a 1,100 mt tariff-rate quota, which is 
similar to the total annual amount Costa Rica has 
imported in each of the last three years.
Currently, Canada has 85 percent of the import 
market share for chilled/frozen pork destined for 
processing in Costa Rica since it has a 33 
percent duty compared to higher duties applied to 
competing products. U.S. pork products currently 
have a 45 percent duty. However, under CAFTA, the 
United States will have duty-free access up to 
1,100 mt, giving it a 33 percent price advantage over Canada.
“Under CAFTA, the Costa Rica market for beef and 
pork will expand, but that expansion will be 
gradual since domestic production is strong,†
said Vernazza-Paganini. “Our goal is to use the 
market access to our advantage and to increase 
consumer awareness of the quality attributes of U.S. red meat products.â€
But from now until the referendum election, USMEF 
is in a holding pattern to see whether CAFTA will be implemented in Costa Rica.
“If 40 percent of the electorate votes in the 
referendum election, then the result will be 
binding,†said Katherine Nishiura, agricultural 
counselor for Costa Rica, Nicaragua and Panama. 
“If less than 40 percent of eligible voters turn 
out, then the National Assembly will ratify the agreement legislatively.â€
Vernazza-Paganini said USMEF is using this time 
to conduct research to identify the best possible 
marketing strategies, to connect with meat buyers 
and importers who are apt to purchase U.S. red 
meat products and to develop good relationships 
with the Costa Rican agriculture industry to 
affirm the United States does not intend to 
supplant their industries and production.
“Even if 40 percent of voters say ‘si’ (yes) to 
CAFTA, Costa Rica still has a lot of work to do,†
said Nishiura. “Thirteen pieces of legislation 
required to implement CAFTA provisions have to be 
passed by the National Assembly and entered into law by the deadline date.â€
The CAFTA ratification deadline is two years 
after the initial agreement ratification, so 
Costa Rica has until Mar. 1, 2008, since the 
agreement was first ratified by El Salvador on Mar. 1, 2006.
The U.S. Meat Export Federation is the trade 
association responsible for developing 
international markets for the U.S. red meat 
industry and is funded by USDA, exporting 
companies, and the beef, pork, lamb, corn, 
sorghum and soybean checkoff programs.
This article can be viewed at: 
http://www.truthabo uttrade.org/ article.asp? id=8062
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