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Australian Free Trade Agreement/Central American Free Trade Agreement
U.S. Trade Representative Robert Zoellick and Australian Minister of Trade Mark Vaile signed a Free Trade Agreement (FTA) that will eliminate more than 99 percent of manufactured goods’ tariffs between the two countries, open services and agricultural markets and further deepen the countries’ strong economic ties. The agreement has been sent to Congress for its review. A key issue for agriculture is the elimination of sanitary and phytosanitary concerns on pork, feed grains, citrus and apples. Nevertheless, American Farm Bureau Federation (AFBF) believes the benefits from the agreement are important to U.S. agriculture. Zoellick also signed the U.S.-Central American Free Trade Agreement. The agreement includes Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. In a statement, AFBF President Bob Stallman said the agreement would provide a substantial competitive advantage to U.S. agriculture. "When the trade agreement is fully implemented, tariffs on U.S. agriculture products imported by CAFTA nations will decrease from between 15 and 43 percent to zero percent," said Stallman. "Farm Bureau estimates CAFTA will result in nearly $900 million in increased U.S. agricultural exports." Stallman said AFBF would work with Congress to secure passage of the trade agreement and will also continue to work in the Doha Round of global trade talks "to secure meaningful progress for America’s farmers and ranchers."

Extraterritorial income tax and highway reauthorization
The World Trade Organization ruled that the exclusion of U.S. corporations’ overseas income, called extraterritorial income, from tax liability is an illegal export subsidy. The European Union (EU) began to impose a 5 percent tariff in March that is going up 1 percent every month. If the tariffs are not stopped, they will reach 17 percent. Some of the agricultural products targeted with tariffs include live animals, meats, dairy products, fruits and vegetables, cereals, wood and paper.

The Senate passed S. 1637 to end the European Union taxes. Also included in the bill was an energy tax incentive package. The incentives include the transfer of excise taxes imposed on ethanol from the general fund to the Highway Trust Fund, thus eliminating the "ethanol penalty." In a statement, AFBF President Bob Stallman said, "America’s farmers and ranchers are encouraged that the Senate has approved legislation (S. 1637) to help end escalating European taxes against U.S. farm products. We also appreciate the inclusion of tax incentives for renewable fuels and other tax reforms that assist the nation’s farm and ranch families. Now it is up to the House to stop taxes by the EU against our farm goods."

OFBF Vice President for Government Affairs Keith Stimpert said that renewable fuels incentives and credits are being added to various bills when appropriate. "Renewable fuels are being championed in different ways, in different bills," he said. "Congress wants to support the renewable fuels industry and is looking for ways, like S. 1637, to spur demand and create jobs."

Off-Road Diesel Emission Rule
The Bush administration signed the Clean Air Nonroad Diesel Rule, which will cut emission levels from construction, agricultural and industrial diesel-powered equipment by more than 90 percent. The new rule also will remove 99 percent of the sulfur in diesel fuel by 2010. Farm Bureau is generally neutral on the rule, but cautiously optimistic that the benefits will outweigh the costs. Also, because of mandated reductions in the sulfur content of diesel, the regulation provides an opportunity for more use of biodiesel. Anticipated costs vary, but the U.S. EPA estimates costs will be in the range of 1 to 3 percent of the total purchase price for new equipment. EPA estimates the additional cost for low-sulfur fuel will be about 4 to 5 cents per gallon. The rule does not include a federal requirement for retrofitting existing engines. Engines are only required to operate at the emission level as of the date of manufacturing.

AgJOBS
The Agricultural Job Opportunity, Benefits, and Security Act (AgJOBS), sponsored by Sen. Larry Craig, R-Idaho, now has 62 senators, including Ohio Senators Mike DeWine and George Voinovich, as co-sponsors. The legislation intends to provide for a more stable, secure, safe and legal American agricultural work force and food supply. The AgJOBS bill would provide a two-step solution: For the short term, on a one-time-only basis, experienced, trusted workers with a significant work history in American agriculture would be allowed to stay here legally and earn adjustment to legal status. For the long term, the currently broken and cumbersome H-2A legal guest worker program would be overhauled and made more streamlined, practical and secure. Ohio Farm Bureau has joined other Ohio agriculture groups in signing a letter that affirms the organization’s support for the bill. According to Ohio Nursery and Landscape Association Executive Director Bill Stalter, who is coordinating the letter, it is being sent to Ohio’s representatives in Congress to encourage them to support the House’s version of the bill, HR 3142.