NCGA Applauds New Trade In Peru

PERU - The National Corn Growers Association (NCGA) applauds the House of Representatives in its 285-132 passage of the Peru Trade Promotion Agreement (PTPA). NCGA will now work toward immediate Senate consideration of the agreement.

9 November 2007

3 minute read

South America

Poultry trade opens up

"Removing trade barriers between the U.S. and Peru will create important new export opportunities for corn growers," said NCGA President Ron Litterer. "This agreement will allow the U.S. to compete on a level playing with Peru's other trading partners. Quick action by the Senate will allow the benefits from this agreement to begin to flow to corn growers."

The PTPA also provides reciprocal access for American farmers and ranchers, as many of Peru's agricultural products have little or no tariffs upon entry into the U.S. through the Andean Trade Preference Act.

Under the Peru FTA, corn growers could expect a penny per bushel increase in price. In addition, the increased demand in beef, pork and poultry converted into bushels of corn would likely mean another one-half cent. The Peru FTA would also improve U.S. corn growers' ability to compete with regional competition such as Argentina.

Currently, Peruvian import duties on corn are bound at 30 percent, with an applied rate of 12 percent. Upon implementation, the FTA provides for immediate tariff elimination under a 500,000 metric ton (19.7 million bushels) corn tariff rate quota (TRQ); in year 10, the TRQ would be increased to 844,739 (33.2 million bushels); in year 12, the TRQ would be eliminated.

Peru is an important potential market for corn's value-added products, such as distiller's dried grains (DDGS). DDGS is currently bound at 0 percent. NCGA estimates that U.S. DDGS production will reach over 30 million tons by marketing year 2010-11.

NCGA is a member of the Agriculture Trade Coalition that supports the PTPA. The Peru agreement is the first of four other pending free trade agreements that await congressional action.

The National Corn Growers Association's mission is to create and increase opportunities for corn growers. NCGA represents more than 33,000 members and 48 affiliated state organizations and hundreds of thousands of growers who contribute to state checkoff programs. For more information on NCGA, log on to www.ncga.com.