PROCESSED PRODUCTS

The Uruguay Round agriculture agreement will establish disciplines in the areas of market access, export subsidies, internal support, and sanitary and phytosanitary measures. In addition, countries have made a number of commitments that will benefit U.S. agricultural exports. Highlights of these commitments for the U.S. processed food industry include the following:

Key Developments for U.S. Exports:

• Japan Reduces Tariffs: Japan will reduce the duty on canned peaches from 14.4% to 8%, fruit cocktail from 11.2% to 6%, and frozen peaches to 7%. The duty on prune juice will be reduced from 22.5% to 14.4%. The duty on frozen prepared sweet corn will be reduced from 12.5% to 7.5%. The duty on canned sweet corn will be reduced from 12.5% to 10%. Japan's wine duty will be reduced from the lesser of 21.3% or 156.8 yen/liter to the lesser of 15% or 125 yen/liter. The minimum duty for these wines has also been reduced from 93 yen/liter to 67 yen/liter.
• Japan Cuts Tariffs on Sugar-Containing Products: Japan will reduce its tariff on candies, caramels and other sugar confectionery from 35% to 25%.
• Korea Increases Access for Fruit Juice: Korea will completely liberalize beverage of fruit juice in 1995 and orange juice in July, 1997 with interim quotas for orange juice of 50,000 tons in 1995, 55,000 tons in 1996 and 30,000 tons for the first six months of 1997. Korea will reduce tariffs on grapefruit juice from the 50% applied tariff rate to 30%. Korea will completely liberalize grape juice and beverage of fruit juice in 1995 and apple juice in 1996.
• Korea Removes the Ban on Dairy Preparations and Potato Flakes and Meal: Korea will remove its ban on certain dairy preparations, including ice cream mix powder and preparations for infant use, on January 1, 1995 and reduce the tariff from 40% to 36% over 10 years. Korea will also remove its ban on potato flour, meal, pellets and flakes and establish a tariff-rate quota for those products of 60 tons. The in-quota tariff will be reduced from the current statutory rate of 9% to a final rate of 5.4%.
• Korea Reduces Other Tariffs: Korea will reduce its tariff on frozen french fries, pork sausage including hot dogs, and soups and broths from 30% to 18%. Korea will reduce the tariffs on canned sweet corn from 25% to 15%, on breakfast cereals from 9% to 5.4% and on mixed feeds for swine, poultry and cattle from 7% to 4.2%. As part of an aggregate quota for corn, corn groats, dried sweet corn and cornstarch will be subject to an in-quota duty of only 3%, which is substantially lower than the current tariffs. The in-quota tariff on popcorn will be reduced from 3% to 1.8%. 
• EU Cuts Export Subsidies for Alcohol: The European Union will reduce the quantity and budgetary outlay for alcohol export subsidies from the current level. In the year 2000, the EU's maximum allowable quantity of subsidized alcohol exports will be 1,147,400 hectoliters, 305,000 hectoliters less than the 1986-90 level.
• EU Cuts Export Subsidies for Wine: The European Union will reduce the allowable quantity of subsidized wine exports by 1,106,000 hectoliters from the 1991-92 average.
• EU Cuts Export Subsidies for Other Processed Products: The European Union will reduce its budgetary outlays on the subsidized export of processed products by over 206 million ECU from the 1986-90 average.
• EU Reduces Tariff on Processed Turkey: The EU will reduce its tariff for processed turkey from 17% to 8.5%.
• EU Reduces Other Tariffs: The European Union will make a 36% tariff cut for potato chips, roasted almonds, and single-strength orange juice.
• Thailand Cuts Tariffs on Sugar-Containing Products: Thailand will reduce tariffs on sugar confectionery and chocolate by one-third to 40% or 33.5 baht/kg except for other chocolate, which will be reduced by two-thirds to 20% or 16.67 baht/kg. Thailand will cut its tariffs on maple sugar and syrup and molasses containing added color or flavor from 65 to 30%.
• Thailand Reduces Tariffs Significantly on many Processed Products: (final tariffs in parentheses): Thailand will cut in half its tariffs on sausages and similar products, french fries, potato chips and other processed potato products, all prepared and preserved nuts, most canned fruit, and all canned vegetables except sauerkraut (30% or 25 baht/kg); protein concentrates (30%); pasta, vegetable juice including tomato, and fruit juice mixtures (30% or 10 baht/kg); tomato sauces including ketchup (30% or 7.5 baht/kg); and mustard (30% or 12.5 baht/kg). Thailand will cut by two-thirds its tariffs on soups and broths (20% or 3.5 baht/kg); breakfast cereals, sweet biscuits, waffles and wafers (20% or 16.67 baht/kg); and miscellaneous edible preparations, including soft drink concentrates (20%). In addition, Thailand will limit the application of alternative specific tariffs to the ad valorem levels bound in its schedule. For many processed products this will result in an immediate and substantial cut in applied tariffs.
• Philippines Cuts Tariffs on Sugar-Containing Products: The Philippines will reduce its tariff for sweetened cocoa powder from 50% to 35%, and its tariff for sugar confectionery from 50% to 45%.
• Philippines Reduces Other Tariffs: The Philippines will lower its tariffs on canned peaches and canned fruit mixtures from the current applied rate of 50% to 35%. It will also reduce the tariff for canned sweet corn from 50% to 45%.
• Malaysia Reduces Tariffs: Malaysia will reduce its duty for canned peaches to 15% and its duty for apple juice from 30% to 20%. The tariffs for herbal tea and other food preparations not elsewhere specified will be reduced from the current applied rate of 25% to 15%.
• Morocco Reduces Tariffs: Morocco agreed to bind its tariffs at 34% for a wide range of processed products, including processed fruits and vegetables, confectionery, protein concentrates, soups and other consumer-ready foods. Current applied rates for these products are generally 40%.
• Swiss Eliminate Grapefruit Juice Tariff: Switzerland will eliminate its tariff for frozen concentrated grapefruit juice by the year 2000.

U.S. Commitments:

• Tariff Reductions:
  • Processed meats 36% cut on pork and poultry, 55- 75% cuts on beef and 100% cut on canned corned beef.
  • Confectionery 15-20% cuts with a 50% cut on the in-quota rate for cocoa preparations in HS 1806.90.
  • Cereal preparations 15% for items where Section 22 quotas apply (HS 1901), 36% for most other headings except 55% for breakfast cereals and baked goods.
  • Processed fruits Wide range of cuts with most sensitive items and vegetables cut by 15% and some cuts as deep as 75% or 100%. Average for the sector is around 36%.
  • Miscellaneous HS Chapter 21 products cut by 15% where Section 22 quotas apply, most other items cut 36% with 55% cuts for soups and homogenized preparations.
  • Beverages 15% cuts for milk drinks, bulk wine, undenatured ethyl alcohol, 100% reductions for beer & distilled spirits, 36-55% cuts for other items.
• Section 22 items: All Section 22 quotas will be converted to tariff-rate quotas with 15% reductions in the over-quota rates and no reduction in the within-quota rates (except for cocoa preparations as noted above). Quotas for dairy products will be expanded immediately with growth over the six-year transition period according to the schedule below. Small portions of these quotas are reserved for Mexico in accordance with the NAFTA agreement. Sugar-containing product quotas will remain the same, except for the restrictions on mixed condiments and seasonings, which will be separated from the other quotas and increased to 700 tons. In addition, the definitions of these quotas will be tightened to restore their original product coverage.

* 100 tons will be set aside for infant formula containing oligosaccharides.

(Note: This fact sheet is a summary of Uruguay Round highlights; it does not reflect all results.)

June 1994

Last modified: Friday, November 18, 2005