Summary of Report
U.S. Farm Exports to APEC Forum Members
Up 23 Percent in FY1995, to Record High
AER-734, May 1996
More than 60 percent of U.S. agricultural exports in fiscal 1995 went to members of the Asia-Pacific Economic Cooperation Forum (APEC). U.S. exports to APEC surged 23 percent over FY1994, reaching a record $33 billion.
A new ERS study, APEC Agriculture and Trade: Asia-Pacific Economic Cooperation Region Buying More U.S. Consumer-Ready Food Products, reports that 90 percent of U.S. farm exports to APEC went to 7 markets: Japan, Canada, Mexico, South Korea, China, Taiwan, and Hong Kong.
In 1995, U.S. agricultural exports rose to all APEC members except Mexico and Brunei. Major factors underlying the trade increase were growing middle-class populations, lowered trade barriers, a weak U.S. dollar, and supply/demand developments in world markets.
The most dramatic growth of U.S. sales in fiscal 1995 was in bulk exports, which grew 34 percent over the previous year to reach $13.5 billion, largely because of grain shortages in China. China shifted from being a net grain exporter to a major net importer, allowing the United States not only to gain a large share of the new Chinese market, but also to reclaim markets it had lost to China in East and Southeast Asia.
Even North Korea purchased U.S. corn in 1995, the first ever sale of U.S. corn to that country. In another first, North Korea acknowledged a chronic deficit in its grain supply and subsequently received considerable amounts of concessional food shipments from nearby APEC members.
Because of its size, China still exerts a large influence on world markets for agricultural products. ERS projects that even though China's grain production will expand by about 1 percent per year in the next decade, China's grain imports will also increase, as a growing population, rising incomes, changing diets, and limited agricultural land resources cause total consumption to increase faster than production.
Indonesia, Thailand, Malaysia, and to a lesser degree the Philippines, have become rapidly expanding markets (up 117 percent in the last 5 years) for U.S. farm exports because of their large populations, buoyant economic performance, and per capita incomes at levels where food is still an important component in consumption.
The United States also holds a large and stable share of the import markets in land-scarce Japan, South Korea, Taiwan, and Hong Kong, which together have accounted for a third of total U.S. farm exports over the last 10 years. Liberalization of formerly severe restrictions on agricultural imports, increasing price competition, rising incomes, and the WEsternization of diets, will promote the future growth of East Asian markets, particularly for high-value and processed food products. If their applications to join the World Trade Organization are accepted, both China and Taiwan would be required to reduce substantially their trade barriers to agricultural imports, which would boost U.S. sales.
Since the mid-1980s, Canada has provided an important growth market for U.S. farm exports. Trade expanded especially rapidly since 1989, when the U.S.-Canada Free Trade Agreement (CFTA) started eliminating barriers to trade over a 10-year period. (CFTA evolved into the North American Free Trade Agreement, or NAFTA, when Mexico joined the group in January 1994.)
The United States has long been Canada's largest farm export market. In fiscal 1995, the United States imported $5.4 billion of agricultural products from Canada, while Canada imported a record $5.8 billion from the United States, making it the world's second largest importer of U.S. farm products (following Japan).
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Updated: September 11, 1996
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