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FACT
SHEET:
U.S.-Peru Trade
Promotion Agreement -
Arizona Farmers Will Benefit
November 2007
Printer Friendly Version
The U.S.-Peru Trade Promotion Agreement (PTPA) provides increased market
access to Arizona’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 Arizona
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 Arizona’s farm prices and income. Such exports
support about 6,200 jobs both on and off the farm in food processing, storage,
and transportation. Agricultural exports amounted to $520 million and made an
important contribution to Arizona's farm cash receipts in 2006 that totaled $2.9
billion.
Beef. As the state’s largest source of state farm cash receipts at $737
million, Arizona’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. Arizona’s dairy producers benefit from the PTPA, contributing to
the state’s farm cash receipts at $504 million in 2006.
- 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 World Trade Organization (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 tariff-rate
quotas (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.
Lettuce. Contributing to the state’s farm cash receipts at $389 million
in 2006, Arizona’s lettuce producers benefit from the PTPA.
- U.S. exporters face a 12-percent duty on lettuce, and under the WTO,
Peru could raise duties to 30 percent.
- Peru will immediately eliminate tariffs on lettuce.
- The Grocery Manufacturers of America publicly supports the PTPA.
Cotton. Providing the state’s fourth largest source of farm cash receipts
($170 million), Arizona cotton farmers benefit 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. exporters.
- The Peruvian market is worth almost $50 million to U.S. cotton
suppliers.
Back to the
U.S.–Peru Trade
Promotion Agreement
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