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NPPC Urges Approval Of Peru Trade Agreement

by 5m Editor
1 July 2006, at 12:00am

WASHINGTON – The National Pork Producers Council, in testimony June 29th, urged Congress to approve the U.S.-Peru Trade Promotion Agreement, which will open the Peruvian market of 28 million consumers to U.S. pork

“The Peru Trade Promotion Agreement, when implemented, will create important new opportunities for U.S. pork producers,” NPPC President Joy Philippi, a pork producer from Bruning, Neb., told the Senate Finance Committee.

Currently, U.S. pork exports to Peru are restricted by duties as high as 25 percent. Under the PTA, tariffs would be reduced on all pork products, with some products receiving unlimited duty-free access upon implementation of the agreement and many other products getting reductions over a five-year period. All pork tariffs would be phased out in 10 years. Significant sanitary and technical issues also were resolved in the agreement, including recognition by Peru of the U.S. meat inspection system as equivalent to its own, which means that all USDA-approved pork facilities will be eligible to export pork to Peru.

An analysis conducted by Iowa State University economist Dermot Hayes found that when the agreement is fully phased in, U.S. pork exports to Peru would raise U.S. live hog prices by 83 cents a head, increasing producers’ profits by 7 percent.

Just as important, Philippi testified, is the impact of the agreement on income growth in Peru. Most consumers in the Andean nation currently are at income levels that do not allow them to consume meat on a regular basis, she pointed out to the committee. Prosperity created by a free trade agreement will create millions of new customers for U.S. meat and other agricultural products.

“The aggressive market-access provisions coupled with the agreement on equivalence make the Peru agreement a state-of-the-art agreement for pork producers to which all future FTAs will be compared,” Philippi told the committee. “It is imperative that Congress approve the agreement not only because it provides producers a means to export significant amounts of pork to Peru but also because it sets a high standard for future trade agreements.”

Peru’s Congress approved the trade pact Wednesday on a 79-14 vote. The country’s president-elect, Alan Garcia, who will be sworn into office July 28, supports the agreement.

The PigSite News Desk

5m Editor