September 29, 2004

 

The Honorable Robert B. Zoellick

U.S. Trade Representative

600 17th Avenue, N.W.

Washington, DC  20508

 

Dear Ambassador Zoellick:

 

Last week, Senators in the Dominican Republic approved legislation that will impose a 25 percent tax on all beverages sold in that country that are sweetened with high fructose corn syrup (HFCS).  Despite repeated warnings from the United States Trade Representative, the Department of State and the United States Congress, the HFCS tax appears to be headed for final approval.  In light of these circumstances, the undersigned organizations strongly oppose the inclusion of the Dominican Republic in the Central American Free Trade Agreement (CAFTA).

 

As you know, the imposition of a similar tax in Mexico has resulted in significant losses to the U.S. corn industry over the past eight years.  The loss of access to Mexico for HFCS means that we no longer have a market for at least 2 million metric tons of HFCS, which equates to 133 million bushels of U.S. corn grown on more than 945 thousand acres, or $620 million in annual sales of HFCS.

 

Support for the Dominican Republic FTA rested on commitments made promising access for HFCS and corn products.  Renegotiation of those provisions in the tax package violates the letter and the spirit of that agreement.  We strongly condemn the actions of the Dominican Republic Government.  Our organizations call on the other CAFTA countries to work with the United States in urging the Dominican Republic to remove the tax prior to U.S. congressional consideration of the CAFTA.  Failure to do so will clearly jeopardize the prospects for passage of the U.S.-Dominican Republic FTA and could complicate matters for U.S. ratification of the CAFTA, an agreement that the corn industry otherwise supports.

 

We urge the Administration to suspend all action on the Dominican Republic FTA and express its strong opposition to officials in that country.  Thank you for your continued support and hard work on behalf of U.S. agriculture.

 

Sincerely,

 

Corn Refiners Association

National Corn Growers Association

U.S. Grains Council

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U.S. Grains Council