BILL ANALYSIS �
AJR 15
Page 1
ASSEMBLY THIRD READING
AJR 15 (Alejo)
As Amended August 30, 2011
Majority vote
ECONOMIC DEVELOPMENT 4-0
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|Ayes:|V. Manuel P�rez, Block, | | |
| |Gordon, Hueso | | |
| | | | |
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SUMMARY : Memorializes to the U.S. Congress and the President
that California encourages the federal government to consider
the jobs and economic role that the California floriculture
industry provides California when advancing free trade
agreements (FTAs), specifically with Colombia. Specifically,
this resolution makes, among others, the following findings and
declarations:
1)Over 75% of domestically grown flowers are grown in
California, accounting for almost 20% of all flowers sold in
the United States, directly supporting more than 10,000 jobs
in the state, and having a $10.3 billion economic impact on
the economy;
2)The number of flower farmers is shrinking rapidly due to
federal trade policies, specifically with countries like
Colombia that have benefitted from the Andean Trade Preference
Act and Colombian (ATPA) and U.S. government subsidies for the
past two decades;
3)ATPA countries, primarily Colombia, supplied 82% of the total
value of U.S. imports of fresh cut flowers in 2009, being
supported by roughly $210 million in subsidies and other
governmental supports from 2005 to 2009, as well as millions
of dollars provided through the U.S. Agency for International
Development (USAID). Colombian exports to the U.S. increased
89% between 2002 and 2010, resulting in a decline in U.S.
flower farmers; and,
4)This resolution does not nullify any preexisting position
taken by the Legislature on FTAs.
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FISCAL EFFECT : None
COMMENTS : Nationwide, consumers purchase an estimated $17
billion in floral items every year providing $5.5 million per
day in economic impact to the U.S. economy, supporting 19,000
jobs and $2.4 million per day in salaries and wages. Roses
remain the best-selling among fresh cut flowers in the U.S.,
with 1.3 billion stems of roses being bought each year. Many
U.S. grown flowers, particularly roses, mums, and carnations,
face strong competition from imports, largely from Colombia and
Ecuador, according to the California Cut Flower Commission
(CCFC).
California is the top flower producing state in the country,
accounting for 75% of all domestically grown cut flowers in the
U.S. The state's top flower producing regions lie along the
coastal plains where there are more than 250 cut flower growers.
About 5,000 acres of land area is used to grow commercial cut
flowers in California. In 2007, sales of California cut flowers
and foliage totaled $330 million, generating $64.7 million in
taxes. Currently, California supplies approximately 20 to 25%
percent of all cut flowers sold in the U.S. with the balance
being imported from South American countries, including
Colombia.
The Colombian cut flower industry is considered by some as one
of the success stories among developing nations. Initially
promoted and funded through the USAID in 1966 as a substitute
for coca, the cut flower industry is now a major contributor to
the Colombian economy. In 2009, Colombian exported 75% of its
flowers to the U.S.
Colombia's export success, however, has been made at the
detriment of U.S. farmers who have raised concerns relative to
USAID's ongoing financial assistance and the open market
advantages provided through the Andean Trade Promotion and Drug
Eradication Act (ATPDEA) where Colombian flowers receive
duty-free treatment when entering the U.S. As a result,
Colombian exports to the U.S. increased 89% between 2002, when
the ATPDEA was implemented, and 2010. During this same term
U.S. acreage under cut flower cultivation declined by 22%.
Ratification of trade agreements: The U.S. Constitution grants
the federal government the power to negotiate treaties and trade
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agreements. Ratification, however, is vested in the U.S.
Congress upon a two-thirds vote of approval. Congress is
prohibited from making amendments to FTAs, however, trade
mitigation related bills may accompany ratification. The U.S.
has 17 FTAs in force. Congressional approval has not been
provided for Colombia, Korea, and Panama.
Colombia currently has access to U.S. markets through the
nation's general preference provisions and the ATPA and the
ATPDEA. The purpose of the ATPA and the ATPDEA is to assist
Bolivia, Colombia, Ecuador, and Peru "promote broad-based
economic development, diversification of exports, consolidation
of democracy, and to help defeat the scourge of drug trafficking
by providing sustainable economic alternatives to drug-crop
production countries." In addition to trade support, the U.S.
funds Plan Colombia, a multi-year initiative to reduce drug
trafficking and promote development. According to the
Congressional Research Bureau, more than $7 billion has been
provided to Colombia (2000 to 2009) pursuant to this initiative.
In 2010, the California Legislature passed AJR 27 (Torrico),
Resolution Chapter 145, Statutes of 2010, that urged the U.S.
Congress to oppose a FTA with Colombia. The primary basis for
this position, as documented through bill analyses, was
Colombia's record on human rights, particularly at it related to
trade unionists. This resolution proposes that the Legislature
transmit additional information to the U.S. Government and the
President relative to the Colombian FTA. In this case, the new
information focuses on its potential negative impact to the
domestic cut flower industry, its workers and the communities in
which they are located.
California's trade-based economy: International trade is a very
important component of California's $1.9 trillion economy. If
California were a country, it would be the 11th largest exporter
in the world. Exports from California accounted for over 11% of
total U.S. exports in goods, shipping to over 226 foreign
destinations in 2010. California exported $408 million in goods
to Colombia in 2010. Major California goods exported to
Colombia were: computer and electronic products (34%);
chemicals (12%); machinery, except electrical (12%); and,
petroleum and coal products (10%). The remaining 32% was
composed of all other types of exports.
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Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN:
0002328