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FACT
SHEET:
U.S.-Peru Trade
Promotion Agreement -
Florida Farmers Will Benefit
November 2007
Printer Friendly Version
The U.S.-Peru Trade Promotion Agreement (PTPA) provides increased market
access to Florida’s agricultural exports by making agricultural trade a two-way
street and leveling the playing field with respect to third country competitors
in the Peruvian market. With immediate elimination of duties on nearly 90
percent of current U.S. trade to Peru, the PTPA will provide Florida producers
and exporters the opportunity not only to preserve but to increase market share
in Peru. The American Farm Bureau and over 40 other agricultural industry and
farm groups strongly support the agreement stating that the agreement would
benefit all U.S. agricultural sectors and allow the United States to become a
competitive supplier of agricultural products to Peru.
Exports of farm products boost Florida’s farm prices and income. Such exports
support about 20,100 jobs both on and off the farm in food processing, storage,
and transportation. Agricultural exports amounted to $1.7 billion and made an
important contribution to Florida's farm cash receipts in 2006 that totaled $7
billion.
Fruits and Preparations. As the state’s leading agricultural exporter
(third in the nation at $589 million), Florida’s fruit producers and processors
benefit from the PTPA.
- Current duties on fruit are 25 percent in Peru, and under World Trade
Organization (WTO) rules, could rise to as high as 30 percent.
- Florida’s citrus growers, with $1.4 billion of farm cash receipts, will
benefit from the immediate elimination of duties on fresh or dried
grapefruit and Tahiti limes, as well as on grapefruit juice. Peru will
phase-out tariffs on oranges, lemons and frozen concentrated orange juice
over five years.
- All duties in this sector will be eliminated within ten years, and
earlier in most cases.
Vegetables and Preparations. Ranking first in the state for cash receipts
and second in exports, Florida’s vegetable producers and processors benefit from
the PTPA.
- Current duties on vegetables and preparations are 12 to 25 percent in
Peru, and under World Trade Organization (WTO) rules, could rise to as high
as 30 percent.
- Providing the largest source of state farm cash receipts, Florida tomato
growers benefit from the immediate elimination of duties on tomatoes and
other tomato products by Peru. Tomatoes ranked third in state cash receipts.
- The American Frozen Food Institute, the Grocery Manufacturers of
America, and the Food Products Association publicly support the PTPA.
Beef. As the state’s fourth largest source of farm cash receipts and
third largest agricultural export sector, Florida’s ranchers and beef industry
benefit from the PTPA.
- Peru will immediately eliminate the 25-percent duties (30-percent
allowed by the WTO) on the beef products of most importance to the U.S. beef
industry – Prime and Choice cuts.
- U.S. exporters of variety meats (offals) will immediately receive
duty-free access under a 10,000-ton tariff-rate quota (TRQ) that will grow
six percent compounded annually. The 12-percent over-quota tariff will be
phased out over ten years.
- Peru will provide immediate duty-free access for U.S. exports of
standard quality beef through the establishment of an 800-ton TRQ that will
grow six percent compounded annually. The 25-percent over-quota tariff will
be phased out over 11 years.
- The United States will phase out its beef tariffs over 15 years except
for those tariffs that are already duty-free under the Andean Trade
Promotion and Drug Eradication Act (ATPDEA). The PTPA will continue the
duty-free treatment.
- Peru agreed to continue to recognize the equivalence of the U.S. meat
inspection and certification system to its own system.
- The American Meat Institute, the National Cattlemen’s Beef Association,
the National Renderers Association, the U.S. Meat Export Federation, the US
Hides, Skin and Leather Association, U.S. Livestock Genetics Export, Inc.,
and the Pet Food Institute publicly support the PTPA.
Dairy. As the state’s sixth largest source of farm cash receipts, Florida
dairy operators benefit from the PTPA.
- Under the PTPA, Peru will immediately eliminate its system of variable
levies (price bands) facing U.S. exporters. Under the system, tariffs can be
as high as the WTO ceiling of 68 percent on some dairy products.
- Peru will immediately eliminate tariffs on whey.
- Both Peru and the United States will establish duty-free TRQs for
certain dairy products totaling 10,000 tons.
- TRQs will grow by ten percent compounded annually, with certain dairy
products subject to safeguards during the tariff phase-out period.
- All Peruvian duties on dairy products will be eliminated within 17
years, with duties on some dairy products eliminated earlier.
- The National Milk Producers Federation, the U.S. Dairy Export Council,
the Grocery Manufacturers of America, the International Dairy Foods
Association, and the Food Products Association publicly support the PTPA.
Sugar. There will be no reductions in the U.S. over-quota duty that
currently provides the equivalent of a 100-percent tariff protection for
domestic producers including the four-percent of Florida’s farms engaged in
sugar production.
- The United States will establish a 9,000-ton TRQ for Peru. This amount
grows very slowly by two percent a year into perpetuity, so that by year 15
of the PTPA implementation, the TRQ will be 11,520 tons. The United States
will also establish a 2,000-ton TRQ for specialty sugar goods from Peru. The
specialty sugar TRQ will not grow.
- Provisions will ensure that Peru will only ship when it is a net surplus
exporter, and provisions have been agreed to allow alternative forms of
compensation to be established to facilitate sugar stock management by the
United States.
- The Sweetener Users Association, the Grocery Manufacturers of America,
and the Food Products Association have expressed support publicly for the
PTPA.
Poultry. With $296 million in state farm cash receipts, Florida’s poultry
producers benefit from the PTPA.
- Peru will provide immediate duty-free access on chicken leg quarters,
which currently faces a 25-percent duty (30-percent allowed by the WTO),
through a 12,000-ton TRQ that expands by eight percent compounded annually.
Peru will phase out the 25-percent over-quota tariff over 17 years with no
reductions during the first eight years.
- Peru will phase out duties on poultry products, such as wings and breast
meat, over five years and on mechanically separated meat over two years.
Most tariffs on turkey products will be phased out over five years.
- Peru will immediately eliminate duties on live chicks and hatching eggs
and will phase out duties on eggs for consumption over ten years.
- Peru agreed to continue to recognize the equivalence of the U.S. meat
inspection and certification system.
- The National Chicken Council, the USA Poultry and Egg Export Council,
the National Turkey Federation, the United Egg Association, the United Egg
Producers, and the Pet Food Institute publicly support the PTPA.
Back to the
U.S.–Peru Trade
Promotion Agreement
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