Promotion Agreement -
Idaho Farmers Will Benefit
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The U.S.-Peru Trade Promotion Agreement (PTPA) provides increased market
access to Idaho’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 Idaho 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 Idaho’s farm prices and income. Such exports
support about 10,800 jobs both on and off the farm in food processing, storage,
and transportation. Agricultural exports amounted to $911 million and made an
important contribution to Idaho’s farm cash receipts in 2006 that totaled $4.4
Vegetables, Including Potatoes and Dried Beans. As the nation’s third
largest exporter of vegetables and preparations with sales of potatoes and dried
beans at over $686 million, Idaho’s vegetable, potatoes, dried bean producers
benefit from the PTPA.
- U.S. exporters currently face duties between 12 and 25 percent, and the
World Trade Organization (WTO) permits duties as high as 30 percent.
- With over $50 million in farm cash receipts for dried peas, lentils and
dried beans, Idaho’s producers benefit from immediate duty-free access for
peas and lentils. Peru will also immediately eliminate tariffs on kidney
beans, white pea beans, and small red beans. Peru will phase out tariffs on
other dried beans over five years.
- Idaho’s potato producers, with over $648 million in farm cash receipts,
benefit from immediate elimination of all duties on potatoes and potato
products, including frozen french fries, potato flakes and potato chips.
- The USA Dry Pea and Lentil Council, the United States Dry Bean Council,
the National Potato Council, the American Frozen Food Institute, the Grocery
Manufacturers of America, and the Food Products Association publicly support
Beef. With cash receipts of $1 billion and accounting for 23 percent of
the state’s total, Idaho’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
- 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.
Wheat and Barley. As the nation’s ninth largest exporter of wheat and
products, and with cash receipts from wheat and barley totaling $481 million,
Idaho’s wheat and barley producers benefit from the PTPA.
- Peru will immediately eliminate the 17-percent tariff (up to 68 percent
allowed by the WTO on certain wheat products) on wheat imports from the
United States as well as the 17 to 25-percent tariff (30 percent allowed by
the WTO) on barley imports.
- Peru will immediately eliminate tariffs on processed wheat products and
on barley malt.
- The National Association of Wheat Growers, the National Grain and Feed
Association, the National Grain Trade Council, the North American Export
Grain Association, the Wheat Export Trade Education Committee, the North
American Millers’ Association, the National Barley Growers Association, and
the American Bakers Association publicly support the PTPA.
Dairy. As the state’s largest source of farm cash receipts at $1.3
billion and the nation’s fourth largest exporter of dairy, Idaho’s dairy
producers benefits 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 2.6-percent of Idaho’s farms engaged in sugar
- 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
- The Sweetener Users Association, the Grocery Manufacturers of America,
and the Food Products Association have expressed support publicly for the
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