25 September 2007

3 minute read

North America

R-CALF USA urges the Committee to follow the lead of several of their colleagues and oppose implementation of the Peru FTA.

“Regrettably, this particular agreement that Congress is about to consider raises serious concerns for independent U.S. cattle producers,” said R-CALF USA Trade Committee Chair Eric Nelson. “Last October, a bipartisan group of Representatives from major cattle-producing states alerted the U.S. Trade Representative (USTR) to these concerns in a formal letter, yet the Peru FTA remains unchanged in these crucial areas.

“While it’s good that Peru reopened its market to U.S. beef last fall and that Peru still cannot export its beef to the U.S. because of foot-and-mouth disease (FMD) concerns, the fact is that Peru is still a major beef-producing nation in South America with significant export potential, particularly if the U.S. tries to carve out a region within Peru, as the U.S. is trying to do for Argentina, to allow beef imports despite Peru’s overall disease problem,” Nelson explained.

“What’s really bizarre is that Peru did achieve a safeguard on its imports of certain beef products from the U.S., but the U.S. did not get any reciprocal price or quantity safeguards on its imports of beef from Peru,” he continued. “This FTA fails in every way to protect U.S. cattle producers in the event Peru gains FMD-free recognition and then ramps up its beef exports to the United States.”

Another concern to R-CALF USA members is the fact that the weak rules of origin in the Peru FTA would allow beef produced from cattle transshipped into Peru from other South American countries to unfairly gain access to the U.S. market under this FTA’s preferential market access terms.

“These rules of origin significantly expand Peru’s export capacity and allow other countries to refuse to participate in FTA negotiations but still reap the benefits of access to the U.S. market,” Nelson said.

Additionally, the Peru FTA neither recognizes the highly perishable and cyclical nature of cattle and beef, nor provides relief to independent U.S. cattle producers in the event of sudden import surges or price volatility that would negatively impact not only their personal livelihoods, but also the welfare of the rural communities they serve.

“In the Trade Act of 2002, Congress instructed the USTR – as a principle negotiating objective in all trade agreements – to improve import relief mechanisms to recognize the unique characteristics of perishable and cyclical agricultural commodities, including livestock and meat products, but this important goal has not been met in recent trade agreements,” Nelson pointed out.

R-CALF USA membership-established policy requires that all trade agreements incorporate the following four provisions to reflect the unique characteristics of the U.S. cattle industry:

1. Special rules to reflect the perishable nature of cattle and beef.
2. Safeguards based on price and quantity to protect against import surges.
3. Rules of origin that require beef to be from cattle actually produced in the exporting country.
4. An upward harmonization of import health and safety standards.

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