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North Carolina is an important producer of agricultural products and a large
exporter. The State's total cash receipts from farming reached $8.7 billion in
2007. The State ranked 14th among all 50 states in 2007 with agricultural
shipments estimated at $2.1 billion. Agricultural exports help boost farm prices
and income, while supporting about 22,380 jobs both on the farm and off the farm
in food processing, storage, and transportation. Exports are important to North
Carolina's agricultural and statewide economy. Measured as exports divided by
farm cash receipts, the State's reliance on agricultural exports was 24 percent
in 2007.
North Carolina's top agricultural exports in 2007 were:
tobacco leaf -- $410 million
live animals and red meats --$372 million
poultry and products --$365 million
cotton -- $172 million
World demand is increasing, but so is competition among suppliers. If North
Carolina's farmers, ranchers, and food processors are to compete successfully
for the export opportunities of the 21st century, they need fair trade
and more open access to growing global markets.
How Trade Agreements Benefit North Carolina Agriculture
Under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR),
U.S. prime and choice cuts of beef gain preferential access as applied tariffs
of 15 to 30 percent are immediately eliminated (except the Dominican Republic)
while those applied to other cuts are phased-out over 15 years. Tariffs on beef
offal and other beef products are phased out over 5 to 10 years. As part of the
agreement, all six countries are working toward the recognition of the U.S. meat
inspection and certification systems, which would replace the existing policy of
plant-by-plant inspections and approval. From 2001 through 2003, U.S. suppliers
annually shipped on average 4,094 metric tons valued at $9.8 million to all six
countries combined.
As one of the leading states in poultry production, North Carolina benefited
under the Uruguay Round agreement when Korea eliminated its import quotas on
frozen chicken in 1997, and reduced its tariffs to between 18 to 20 percent by
2004. These steps supported a rise in U.S. poultry to 120,000 tons valued at $79
million by 2002. The Philippines opened a tariff-rate quota for poultry meat of
16,701 tons in 1998, which rose to 23,500 tons by 2004.
Under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR),
all applied import tariffs on U.S. poultry meats that currently range between 30
and 164 percent will be eliminated over 10 to 18 years depending on the product
and country. Each country also commits to adopting a "systems approach" to the
recognition of the U.S. poultry inspection system, thereby eliminating
plant-by-plant inspections and facilitating trade. From 2001 through 2003, U.S.
poultry meat suppliers annually shipped on average 65,550 metric tons valued at
$61 million to all six countries combined.
North Carolina benefits under NAFTA with new rules of origin that increase
demand for U.S. textiles in Canada and Mexico. Mexico’s 10-percent tariff on
cotton has been eliminated. This tariff reduction supports U.S. cotton exports
to Mexico, which rose from 558,000 bales to 2.2 million bales from marketing
year 1995 to 2002. U.S. industry estimates that the Caribbean Basin Initiative
and Africa Growth and Opportunity Act will increase annual cotton sales by
100,000 bales.
Export Success Stories
The North Carolina seafood industry benefited when an FAS-led trade mission
traveled to Nigeria to explore untapped commercial opportunities for U.S.
seafood products. The team, which also included an official from the Virginia
Department of Agriculture and Consumer Services and a North
Carolina/Virginia-based supplier of Atlantic croaker met with importers, visited
cold storage facilities and markets, and consulted with a Lagos-based shipping
company interested in handling consolidated shipments of U.S. products to West
Africa. Following the mission, the croaker supplier received several trade leads
that resulted in sales of more than $100,000.