South America | U.S.-Peru FTA Offers Opportunity For U.S. Pork And Beef Expor...
South America
U.S.-Peru FTA Offers Opportunity For U.S. Pork And Beef Exports
On Dec. 4, the U.S. Senate approved the U.S.-Peru Trade Promotion Agreement by a vote of 77-18. Since the House of Representatives had already passed the agreement, it now goes to President Bush for his signature. Negotiations were initiated in May 2004 at the same time as free trade talks with Colombia and Ecuador.
The agreement provides for tariff phase-out in 10 years or less on all pork products. Fresh, chilled and frozen pork (0203) will pay a 20 percent import duty declining to zero percent in the 5th year. Import duties for frozen edible offals (020649) will start at 13.6 percent and hit zero in year 5. Peru is 99 percent self-sufficient in pork; its annual pork imports total only about 1,000 metric tons (mt), 90 percent of which come from its large pork producing neighbor Chile. Growth in U.S. pork exports will be slow, according to USMEF Director, Central & South America and Global Strategic Coordination Ricardo Vernazza-Paganini, especially in the first few years of the agreement when the tariff is still greater than the 3 percent paid by Chile.
Under the agreement, the United States will have immediate duty-free access for high quality USDA Prime and Choice beef cuts. All other tariffs on beef and beef products will be eliminated within 15 years or earlier in a number of cases. Standard and Select Quality beef will have an 800-mt, duty-free tariff rate quota (TRQ) with 6-percent annual growth and a 25-percent above-quota tariff phased out over 12 years. U.S. beef offal will have a 10,000-mt, duty-free TRQ with 6-percent growth and a 12-percent above-quota tariff phased out over 10 years.
Peru is a small market. Its total annual consumption of beef and beef variety meats is about 120,000 mt. According to Vernazza-Paganini the agreement will, however, mean increased U.S. exports of beef hearts, perhaps up to as much as 5,000 mt three or four years after the agreement comes into force. Grilled beef hearts are the Peruvian national dish, anticuchos. High-quality U.S. beef cuts face stiff competition from Peru’s beef producing neighbors, Argentina, Brazil and Paraguay. Nevertheless the removal of the 25 percent tariff and the 800-mt quota for Standard and Select should help increase U.S. beef exports to Peru.
South America
U.S.-Peru FTA Offers Opportunity For U.S. Pork And Beef Exports
On Dec. 4, the U.S. Senate approved the U.S.-Peru Trade Promotion Agreement by a vote of 77-18. Since the House of Representatives had already passed the agreement, it now goes to President Bush for his signature. Negotiations were initiated in May 2004 at the same time as free trade talks with Colombia and Ecuador.
The agreement provides for tariff phase-out in 10 years or less on all pork products. Fresh, chilled and frozen pork (0203) will pay a 20 percent import duty declining to zero percent in the 5th year. Import duties for frozen edible offals (020649) will start at 13.6 percent and hit zero in year 5. Peru is 99 percent self-sufficient in pork; its annual pork imports total only about 1,000 metric tons (mt), 90 percent of which come from its large pork producing neighbor Chile. Growth in U.S. pork exports will be slow, according to USMEF Director, Central & South America and Global Strategic Coordination Ricardo Vernazza-Paganini, especially in the first few years of the agreement when the tariff is still greater than the 3 percent paid by Chile.
Under the agreement, the United States will have immediate duty-free access for high quality USDA Prime and Choice beef cuts. All other tariffs on beef and beef products will be eliminated within 15 years or earlier in a number of cases. Standard and Select Quality beef will have an 800-mt, duty-free tariff rate quota (TRQ) with 6-percent annual growth and a 25-percent above-quota tariff phased out over 12 years. U.S. beef offal will have a 10,000-mt, duty-free TRQ with 6-percent growth and a 12-percent above-quota tariff phased out over 10 years.
Peru is a small market. Its total annual consumption of beef and beef variety meats is about 120,000 mt. According to Vernazza-Paganini the agreement will, however, mean increased U.S. exports of beef hearts, perhaps up to as much as 5,000 mt three or four years after the agreement comes into force. Grilled beef hearts are the Peruvian national dish, anticuchos. High-quality U.S. beef cuts face stiff competition from Peru’s beef producing neighbors, Argentina, Brazil and Paraguay. Nevertheless the removal of the 25 percent tariff and the 800-mt quota for Standard and Select should help increase U.S. beef exports to Peru.