Promotion Agreement -
Louisiana Farmers Will Benefit
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The U.S.-Peru Trade Promotion Agreement (PTPA) provides increased market
access to Louisiana’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 Louisiana
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 Louisiana’s farm prices and income. Such
exports support about 7,600 jobs both on and off the farm in food processing,
storage, and transportation. Agricultural exports amounted to $641 million and
made an important contribution to Lousiana's farm cash receipts in 2006 that
totaled $2.2 billion.
Rice. As the state’s second largest export at nearly $136 million and as
the second largest farm cash receipts at $210 million, rice producers benefit
from the PTPA.
U.S. rice exporters currently face a system
of variable levies (price band system) that result in tariffs as high as the
World Trade Organization (WTO) ceiling of 68 percent.
Peru will immediately eliminate the price
band system on imports from the United States.
Peru will establish a 74,000-ton, zero-duty
rice tariff-rate quota (TRQ) that will grow six percent compounded annually.
All rice types will be eligible for the TRQ with the quantity on a
milled-equivalent basis. The over-quota tariff will be phased out over 17
years with no reduction during the first eight years.
The USA Rice Federation publicly supports the
Cotton. With cotton exports ranked first at $264 million and the largest
in farm cash sales, Louisiana benefits from the PTPA.
The PTPA provides for reciprocal elimination
of all cotton duties.
Under the PTPA, Peru will immediately
eliminate the 12-percent tariff (30-percent allowed by the WTO) facing U.S.
The Peruvian market is worth almost $50
million to U.S. cotton suppliers.
Beef. Providing the fourth largest source of cash receipts in the state,
Louisiana’s beef 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 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
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
Corn. With nearly 462,000 acres planted in corn, Louisiana’s corn
producers 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 corn products.
- Peru will provide immediate duty-free access by establishing a
500,000-ton TRQ that grows six percent compounded annually. Peru will phase
out the over-quota tariff over 12 years.
- All currently applied duties on crude corn oil will be phased out over
three years; on high fructose corn syrup over five years; and on white corn
and other corn products within ten years.
- The Corn Refiners Association, the National Corn Growers Association,
the National Grain and Feed Association, the National Grains Trade Council,
the North American Export Grain Association, the North American Millers’
Association, the American Feed Industry Association, and the Pet Food
Institute publicly support the PTPA.
Soybeans and Products. As the third largest export and fifth largest
source of farm cash receipts in the state, Louisiana’s soybean producers benefit
from the PTPA.
Peru will immediately eliminate duties,
currently ranging from four to twelve percent (30 percent allowed by the WTO)
on soybeans, soybean meal, and crude soybean oil.
Peru will provide duty-free access for
refined soybean oil by establishing a 7,000-ton, duty-free TRQ that will
grow five percent compounded annually. Peru will phase out the over-quota
tariff over ten years.
The American Soybean Association, the
National Oilseed Processors Association, the American Feed Industry
Association, and the Pet Food Institute 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 2.4-percent of Louisiana’s farms engaged in
The United States will establish a 9,000-ton
TRQ for Peru. This amount grows very slowly by 2 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.
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