Apr 7, 2007
Peruvian Asparagus Will Stay Duty-Free

Peruvian asparagus will have duty-free access to the United States until June 30 – and possibly longer.

In December, Congress voted to extend the Andean Trade Preference Act (ATPA) another six months. The extension was part of a bill signed by President George Bush Dec. 20. U.S. asparagus growers opposed extending ATPA, which has damaged the domestic industry severely since it was enacted in 1991.

“Two thousand percent increases are pretty hard to deal with,” said John Bakker, executive director of the Michigan Asparagus Advisory Board.

ATPA was designed to curtail drug production in Peru and other Andean countries by giving asparagus and other commodities duty-free access to the United States. As a result, the Peruvian asparagus industry exploded almost overnight, and the U.S. market was flooded with cheap Peruvian exports. American growers found it hard to compete.

In 2005, U.S. growers were hoping a free trade agreement with four Andean countries – Peru, Bolivia, Columbia and Ecuador – would supercede ATPA and put trade protections for the U.S. industry in place. Negotiations for that agreement fell apart last year, so the U.S. government started negotiating individual free trade agreements with each country. Bolivia and Ecuador have issues to work out, but trade agreements with Columbia and Peru are considered more likely, said Alan Schreiber, executive director of the Washington Asparagus Commission.

ATPA was extended for six months to give the United States and Peru more time to negotiate a free trade agreement. Even if an agreement passes (neither Bakker nor Schreiber could predict if it would), there’s no guarantee it will include protections for U.S. asparagus growers.

Typical free trade agreements include some sort of tariff phase-out for sensitive commodities like asparagus, but U.S. growers never got that. ATPA wiped out their competitive advantages overnight, Bakker said.

“We want to see a free trade agreement debated,” he said. “We want legislators to figure out how badly our industry has been injured by the unintended consequences of ATPA.”

If the Peru agreement does not include protections for American asparagus, the U.S. industry will not support it, Bakker said. American growers offered to support the agreement if it included a tariff phase-out, but the Peruvian industry wasn’t interested, according to Schreiber.

ATPA could be extended again, whether or not the U.S. government approves a free trade agreement with Peru. If an agreement passes, ATPA could be lengthened another six months to create a transition period. If an agreement does not pass, ATPA could still be extended, according to both executive directors.


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