Printer Friendly Version

The U.S.-Peru Trade Promotion Agreement (PTPA) provides increased market access to Washington’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 Washington 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 Washington’s farm prices and income. Such exports support about 26,400 jobs both on and off the farm in food processing, storage, and transportation. Agricultural exports amounted to $2.2 billion and made an important contribution to Washington's farm cash receipts in 2006 that totaled $6.1 billion.

Fruits. As the nation’s second largest exporter of fruits and preparations ($833 million), Washington fruit producers benefit from the PTPA.

• Peru’s current duties on fruit are 25 percent, and under World Trade Organization (WTO) rules, Peru could raise these duties to as high as 30 percent.

• Washington state’s apple, pear, and cherry producers account for over $1.8 billion in cash farm receipts. Washington’s grape producers and raspberry producers account for over $144 million and $21 million in state farm cash receipts, respectively.

• Under the PTPA, Peru will immediately eliminate tariffs on these products (both fresh and frozen).

• The Northwest Horticultural Council publicly supports the PTPA.

Dairy. Providing the second largest source of farm cash receipts at over $686 million, Washington’s 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 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.

Beef. Providing the state’s third largest source of farm cash receipts at over $649 million, Washington’s ranchers and beef cattle industry benefit from the PTPA.

• Peru will immediately eliminate the 25-percent duties (30-percent allowed by the World Trade Organization (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 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. With over $314 million in export sales and total farm cash receipts of over $520 million, Washington’s 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.

Potatoes. With over $497 million in farm cash receipts, Washington’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.

Asparagus. The PTPA does not change the duty-free treatment Peru already receives from the United States.

• Under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), Peru currently receives duty-free treatment on its fresh and processed asparagus exports into the United States.

• The PTPA will continue the same duty-free treatment.