FTAA's statedobjective is to reduce and eliminate barriers to trade in goods (including agricultural commoditiesand food products) and services, and facilitate cross-border investment, allowing all countries totrade and invest with each other under the same rules. Following the timetable agreed upon in Quebec City, FTAA countries during 2003 have exchanged detailed offers and counteroffers designed to reduce and eliminate tariffs and quotas ontraded goods. In November 2002, trade ministers released the second draft consolidated text of anFTAA agreement covering all issue areas. Substantial differences in viewpoints continue to bereflected in the FTAA's chapter on agriculture, particularly on the issue of domestic farm subsidies. Many note that negotiating free trade in agricultural products could prove to be one of severaldifficult issues in the FTAA talks, as was the case in the negotiations between the United States andMexico on the agricultural provisions of the North American Free Trade Agreement (NAFTA). Agricultural Trade in the Western Hemisphere

Hemispheric trade liberalization would directly affect U.S. agricultural trade with the countrieslocated in South America, Central America, and the Caribbean (except Cuba). These sales represented 8% of worldwide U.S.agricultural exports, or 21% of farm exports to the region. Entries accounted for 17% of all U.S. agricultural imports, or 31% ofimports from the region. The pertinent objectives call for:
eliminating those measures that countries use to restrict the entry of agricultural products into their markets, 
developing disciplines on the use of export subsidies and other mechanisms that can distort trade in agricultural products, and 
ensuring that rules to protect food safety and plant and animal health will be based on science, and not applied on a discriminatory basis or as a disguised trade restriction. FTAA's Possible Impact on U.S. Agriculture

U.S. agriculture would benefit to some degree from U.S. participation in an FTAA thateliminates tariffs throughout the Western Hemisphere, according to a USDA analysis. (12) It found thaton an annual basis U.S. farm income (in 1992 dollars) would be $180 million higher (0.08%), totalagricultural exports would increase by $580 million (1%), and total agricultural imports would riseby $830 million (3%). According to this analysis, completetrade liberalization under an FTAA would mean increased competition for U.S. sugar and orangejuice. (14) It requires USTR to:
consult with the House Agriculture and Ways and Means Committees, and the Senate Agriculture and Finance Committees, on whether any further tariff reductions on anyidentified product "should be appropriate, taking into account the impact of any such tariff reductionon the United States industry producing the product," on whether any covered product faces"unjustified sanitary or phytosanitary restrictions, including those not based on scientific principlesin contravention of the Uruguay Round Agreements," and on whether countries in the negotiationsuse export subsidies or other trade-distorting measures on products that affect U.S. producers of suchproducts,
request the International Trade Commission to "prepare an assessment of the probable economic effects of any such tariff reduction on the U.S. industry producing the productconcerned and on the U.S. economy as a whole," and
upon completing these steps, notify the four above-identified congressional committees of those products identified in the first step "for which the Trade Representative intendsto seek tariff liberalization in the negotiations and the reasons for seeking such tariffreductions." Thereis a widely held view that U.S. agriculture expects to benefit more, or would have less to lose, froma comprehensive multilateral WTO agreement compared to an FTAA agreement, 
If an FTAA agreement is reached that reflects the objectives agreed to by trade ministers in 1998, U.S. farm policymakers may have to contend with the repercussions of opening the U.S.market to import-sensitive farm products.
Leaders of Western Hemisphere countries have agreed to negotiate a Free Trade Area of the Americas (FTAA) agreement by 2005. FTAA's objective is to promote economic growth anddemocracy by eliminating barriers to trade in all goods (including agricultural and food products)and services, and to facilitate investment. If diplomats reach agreement, free trade in the hemispherecould occur by 2020.
Negotiations on FTAA's agriculture component have become contentious. FTAA's negotiating objectives for agriculture call for removing tariffs and other barriers to agricultural imports in eachcountry, developing disciplines on the use of export subsidies and other mechanisms that distortagricultural trade, and ensuring that rules on food safety and animal and plant health are not used asdisguised trade barriers. Following an agreed-upon timetable, FTAA countries during 2003exchanged detailed offers and counteroffers designed to reduce and eliminate tariffs and quotas onall traded goods. The agriculture chapter in the second draft consolidated text of an FTAAagreement issued in November 2002 continues to reflect differences in viewpoints among countrieson substantive agricultural issues. Strong differences currently exist between the United States andBrazil over how to address in the FTAA the issue of domestic farm subsidies and agricultural exportsubsidies. This issue has become pivotal in efforts to reach an agreement on FTAA's scope(comprehensive or scaled back) in the period leading up to the FTAA Ministerial in Miami onNovember 17-21.
Much of U.S. agricultural trade with Canada and Mexico already occurs free of barriers under the North American Free Trade Agreement. Accordingly, an FTAA would primarily affect U.S.agricultural trade with the countries of South America, Central America, and the Caribbean. Salesto these three markets currently account for a small share (8%) of U.S. farm product exports. Agricultural imports from these three regions, by contrast, account for 17% of all such U.S. imports.
A 1998 U.S. Department of Agriculture analysis finds that U.S. agriculture would benefit to some degree with U.S. participation in an FTAA that eliminates all tariffs throughout the region. According to this analysis, U.S. farm income would be $180 million (1%) higher than without anagreement, U.S. agricultural exports would increase by $580 million (1%), and U.S. agriculturalimports would rise by $830 million (3%).
Some agricultural product sectors expecting to gain from increased sales are supportive of the FTAA initiative. Others appear to be ambivalent, preferring instead that the Bush Administrationplace more emphasis on liberalizing agricultural trade on a multilateral basis under the WTO. Producers of import-sensitive food products (i.e., sugar and orange juice) are concerned aboutincreased competition. They seek to be excluded from FTAA coverage or be covered by the longesttransition periods possible. Under trade law, the Executive Branch must follow special consultationprocedures with Congress on import-sensitive agricultural products covered by the FTAA agreement. This report will be updated periodically .