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FACT SHEET:
 U.S.-Peru Trade Promotion Agreement - Delaware Farmers Will Benefit
November 2007
 

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The U.S.-Peru Trade Promotion Agreement (PTPA) provides increased market access to Delaware’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 Delaware 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 Delaware’s farm prices and income. Such exports support about 1,700 jobs both on and off the farm in food processing, storage, and transportation. Agricultural exports amounted to $145 million and made an important contribution to Delaware's farm cash receipts in 2006 that totaled $969 million.

Poultry. Contributing over 76 percent of the state’s farm cash receipts at $739 million and as the state’s leading export sector, Delaware’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 World Trade Organization (WTO)), through a 12,000-ton tariff-rate quota (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.

Soybeans and Products. As the state’s fourth leading source of farm cash receipts at $29 million and the fourth largest export sector, Delaware’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.

Corn. Providing the state’s second largest source of farm cash receipts at over $47 million, Delaware 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.

Dairy. Contributing $17 million in state farm cash receipts, Delaware dairy 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 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.

Potatoes and Products. With over $4 million in farm cash receipts, Delaware’s potato producers benefit from the PTPA
  • Peru will immediately eliminate all duties, which are currently as high as 25 percent (30 percent allowed by the WTO), on potatoes and potato products, including frozen french fries, potato flakes and potato chips.
  • The National Potato Council, the American Frozen Food Institute, the Grocery Manufacturers of America, and the Food Products Association publicly support the PTPA.

Wheat. As the state’s third largest export sector, Delaware wheat 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) wheat imports from the United States.
  • Peru will immediately eliminate tariffs on processed wheat products.
  • 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, and the American Bakers Association publicly support the PTPA.


Back to the U.S.–Peru Trade Promotion Agreement