The Senate passed the U.S.-Peru Trade Promotion Agreement, one of a series of bilateral trade pacts the Bush administration is pushing in the absence of any significant progress on the WTO Doha Round negotiations.
In a rare display of bipartisan cooperation, senators voted 77-18 on Tuesday (Dec. 4) to approve the agreement, which analysts say could increase U.S. agricultural trade by $705 million per year after full implementation.
Most farm organization leaders voiced their approval of the Peru accord and called on Congress to move ahead with similar agreements with Colombia, Panama and Korea. Several administration officials recently traveled to Colombia to highlight the need for a new trade pact.
“It is important for Congress to continue the process of leveling the playing field for our producers, eliminating restrictive tariffs on U.S. exports and allowing the strengths of American agriculture to shine through by moving forward with the Colombia, Panama and Korea trade agreements,” said acting Agriculture Secretary Chuck Conner.
Conner said the administration believes the future of U.S. agricultural growth depends on gaining access to newly affluent demographic sectors in countries like Peru where the middle class is growing rapidly.
“In fiscal year 2007, U.S. exporters sold nearly $333 million in agricultural products in Peru and our agricultural producers stand ready to provide an expanding range of high-value and consumer-ready products to this emerging market,” he said.
“The agreement will also help to keep U.S. bulk commodities competitive in the Peruvian market. On the day the agreement takes effect, 90 percent of our food and agricultural products will enter Peru duty-free, greatly increasing the competitiveness of U.S. goods.”
On the other side of the coin, the Peruvian economy stands to gain from enhanced investment opportunities and Peruvian agriculture will benefit from greater participation in the global marketplace.
“The resulting job creation in Peru’s agriculture sector will support U.S. and Peruvian counter-narcotic efforts,” said Conner. “Increased prosperity for Peru promises a stable government, a stalwart trading partner and democratic presence in South America.”
American Farm Bureau President Bob Stallman commended the Senate for its quick passage of the Peru trade agreement and asked Congress to pass the Colombia and Panama agreements so that “we can continue opening markets for our products, while reaching out to new trading partners.
“AFBF urges Congress to bring up to vote the remaining two Latin American agreements as soon as possible,” he said. “We look forward to continuing to work with Congress toward passage of these outstanding agreements.”
The Senate vote came only a few weeks after the House passed the pact by a vote of 285-132. Farm groups such as the National Corn Growers Association had been asking Senate leaders to move quickly on the agreement.
“Today’s vote is a victory for the United States and Peru,” said NCGA President Ron Litterer, a corn producer from Greene, Iowa. “NCGA thanks the Senate for recognizing the importance of leveling the playing field with Peru since many of Peru’s products have little or no tariffs on entry into the United States under the Andean Trade Preference Act.”
Currently, Peruvian import duties on corn are bound at 30 percent, with an applied rate of 12 percent. Upon implementation the Peru FTA provides for immediate tariff elimination under a 500,000-metric-ton corn tariff rate quota. In year 10, the TRQ would be increased to 844,739 metric tons and, in year 12, the TRQ would be eliminated.
One farm group, R-CALF USA, issued a press release thanking the senators who voted against the agreement and listing the improvements it believes are needed in future such agreements. Those include making certain that strong health and safety standards are in place for imported live and processed agricultural products.
“We hope the issues that we brought up for discussion will be considered before moving forward on any trade agreements for independent cattle producers,” said Max Thornsberry, president of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America.
The American Manufacturing Trade Action Coalition, an umbrella group for a number of manufacturing organizations, also repeated its opposition to such agreements in a statement.
“The Peru FTA simply is a continuation of the flawed trade policy model of trade deficits, offshoring and job losses,” said AMTAC Executive Director Auggie Tantillo. “Evidently, a key message from the last election — stop offshoring good middle-class U.S. manufacturing jobs — still has not registered with the new leadership in this Congress.”
Tantillo, a former trade official in the Reagan administration, said the focus on the Peru FTA instead of “passing a strong anti-currency manipulation bill is an enormous disappointment to U.S. manufacturers desperate for relief from China’s predatory trade practices.
“The value of the illegal currency subsidy given by China to its manufacturing exporters dwarfs the trade covered by the proposed Peru FTA several times over,” Tantillo said.