ERS researchers found that the new ASEAN FTAs are most likely to affect U.S. exports of processed agricultural products, especially in the subcategory labeled in the trade data as “food preparations: composite mixtures”—a diverse category of products such as beverage bases, some snack foods, some fruit juice preparations, coffee whiteners, herbal tea mixes, and some gelatin preparations.

U.S. processed food exports to the ASEAN nations are projected to decline by $123 million per year after FTA tariff reductions. The U.S. faces strong competition for exports of processed products to ASEAN countries from food industries in China and Oceania. Tariffs also tend to be higher because many countries try to protect their food manufacturing industries. U.S. processed food exports to China and Oceania will fall by smaller amounts, in part because U.S.-ASEAN competition in those export markets is not intense.

U.S. exports of fruit and vegetables to ASEAN members and to China are projected to fall by over $50 million per year and by about $30 million per year, respectively. U.S. fresh and processed fruit exports, in particular, face considerable competition in the region. U.S exports of dairy and poultry products to ASEAN, especially to the Philippines, are projected to decline an estimated $43 million per year, while wheat exports to ASEAN could drop by about 6 percent, or $40 million annually.

Total U.S. agricultural exports to ASEAN members are projected to fall by almost $350 million, or 5 to 6 percent of actual 2009 exports to the region. However, despite some lost trade to China, particularly in processed products, total U.S. agricultural exports to China are expected to rise by over $16 million per year after full implementation of the ASEAN FTA, and U.S. agricultural exports to Oceania will be virtually unchanged. Declining exports in some commodity/product markets in China and Oceania are balanced by gains in other markets. As China, Australia, and New Zealand increase exports to ASEAN countries, they import more commodity inputs from the United States. For example, China is projected to increase imports of U.S. soybeans and cotton to meet new demands in ASEAN for its livestock products and textiles.

U.S. agricultural exports to the rest of the world are projected to rise in the aftermath of the ASEAN FTAs. U.S. products shift from the new FTA zones to other parts of the world, and some products that the ASEAN FTA trade partners formerly shipped to third-country destinations are exported to ASEAN instead, leaving a gap for U.S. trade to fill.

Globally, U.S. agricultural exports are projected to decline by $170 million after implementation of the ASEAN FTAs. Since the countries involved account for one-fifth of U.S. agricultural exports ($20 billion), the impact is small relative to the size of these FTA markets—smaller still in relation to total U.S. exports. The strong competitive position of the United States and relatively low tariffs facing U.S. exports in the two ASEAN FTAs reduce the adverse impact of these agreements on U.S. agricultural sales in the world marketplace.