NCGA: Peru free trade agreement a good move for U.S. corn

NCGA: Peru free trade agreement a good move for U.S. corn

The 2009 Peru FTA has benefits for U.S. corn growers and Trade Promotion Authority, TPP will too, NGCA says

Since Feb. 1, 2009, the U.S.- Peru free trade agreement has spurred new sales of U.S. corn, a new USDA Global Agricultural Information Network report says.

Related: TPA trade bill full speed ahead

The report, released earlier this month, provides a strong argument for pending trade deals and the Trade Promotion Authority, says John Linder, chairman of the National Corn Growers Association's Trade Policy and Biotechnology Action Team.

The 2009 Peru FTA has benefits for U.S. corn growers and Trade Promotion Authority, TPP will too, NGCA says

Trade Promotion Authority, which has been approved by both House and Senate committees and now awaits action in both Chambers, allows for an up-or-down vote on key trade deals, which may improve trading partners' confidence in the United States' negotiating position, supporters say.

The report's data on the Peru FTA points to an increase of U.S. corn exports. This marketing year alone, NCGA points out, Peru has outstanding sales and accumulated exports of more than 75 million bushels of U.S. corn as of April 16, compared to only 43 million bushels last year at the same time.

Related: Long-awaited Trade Promotion Authority legislation surfaces

"The possibilities for farmers are growing by the day," Linder said of expanding markets and potential trade deals. "These markets not only help build demand for U.S. corn but also support American jobs and benefit the U.S. economy as a whole."

Peru looks good, more trade deals even better
Another export promotion organization, the U.S. Grains Council, has been active in promoting trade with Peru, says USGC Regional Director for the Western Hemisphere Marri Carrow.

"Peruvian buyers are becoming more sophisticated in purchasing grains but have indicated they have a preference for U.S. corn," Carrow said. "This trade agreement is a great example of how reducing trade barriers to create mutually beneficial trade partnerships increases opportunities for U.S. products."

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Currently, two-thirds of U.S. farm exports to Peru receive duty-free treatment. U.S. corn still has a tariff rate quota of 27.9 million bushels, which was filled within the first week of 2015. While this TRQ is in the process of being phased out over the next nine years, sales of U.S. corn are continuing because of the PTPA, NCGA said.

Related: Quality of 2014-15 U.S. corn for export strong, USGC says

"With last year's drop in agricultural commodity prices, the price ban system was activated," Carrow said. "Due to Peru's PTPA commitments, it could not fully assess the variable levy mandated by the price ban system against U.S. corn. This gave U.S. corn an advantage over corn sourced from other suppliers, including Argentina and Brazil."

Building on this advantage, the Council is trying to expand U.S. corn exports to Peru. The group plans in-person meetings with Peruvian clients.

Despite the progress, USGC and NCGA say the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership still hang in the lurch, and are important to future trade of U.S. corn.

"These trade agreements would provide a similar benefit to U.S. farmers as the PTPA on a larger scale by easing barriers to free trade in multiple countries in Asia and Europe," NCGA said.


See daily USDA-reported export sales data on Farm Futures!


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