U.S.: Who stands to gain what through TPP tariff reductions? - FreshFruitPortal.com

U.S.: Who stands to gain what through TPP tariff reductions?

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U.S.: Who stands to gain what through TPP tariff reductions?

The historic Trans-Pacific Partnership (TPP) deal struck earlier this week is poised to boost the U.S. agricultural export industry, but some markets are prepared to let their trade barriers down far more quickly than others.

New fact sheets released by the U.S. Department of Agriculture (USDA) provide a summary of what can be expected from the other 11 Pacific Rim countries, and what specific commodities stand to gain.shipping

Current U.S. free trade agreements with Australia, Chile, Peru, Singapore, Canada and Mexico mean horticultural commerce with these markets will be largely unaffected.

However, the TPP provides new market access for U.S. fruit and vegetable exports to Japan, Malaysia, Vietnam, New Zealand and Brunei.

While New Zealand and Brunei will eliminate all import tariffs immediately upon the deal's ratification, for other countries the timings are variable and depend on the commodity.

Here we take a look at what U.S. exporters can expect in terms of tariff reductions and when.

Fruits - Fresh and Processed (Excluding Citrus)

In the case of Japan, tariffs would be eliminated immediately on almost all fresh and processed fruits. Tariffs on some fresh apples would disappear within 11 years, and fresh cherries within six years.

Vietnam would eliminate fresh fruit tariffs in four years or less, while the phasing out of tariffs for processed fruits may take double the time.

With Malaysia, tariffs would be eliminated immediately on processed fruits and fresh apples, cherries and pears. The elimination of tariffs for other fresh fruits, however, may take up to a decade.

However, as California Fresh Fruit Association (CFFA) president Barry Bedwell points out, trade barriers can be far more complex than tariffs alone.

"Using Japan as a good example, we currently see tariffs on stonefruit such as peaches, nectarines, apricots and plums at 6%," he told www.freshfruitportal.com.

"Yet because of phytosanitary requirements and the costs and details associated with export work plans that would need to be developed, there are no exports of California stonefruit to Japan currently.

"With the eventual elimination of tariffs, the opportunity for exports would rightfully grow but the issues involved with phyto-sanitary issues must still be addressed."

He said this was why it was so important to see all of the TPP agreement language to verify how these issues were addressed.

Despite these issues, Bedwell emphasized that overall the CFFA was 'very supportive' of the deal, adding he hoped the proportion of California table grapes and tree fruit exported would grow from 40% and 25% respectively upon the treaty's finalization.

California is the largest U.S. fruit (excluding citrus) producer, according to the USDA, followed by Washington, Michigan, New York, Oregon, Pennsylvania and Florida.

Citrus Fruits and Juices

Vietnam currently has import tariffs in place for citrus, with grapefruit, lemons and oranges all currently between 25-30%.

However, the ratification of the TPP would see duty on grapefruit and lemons eliminated in three years, and fresh oranges in four years. Tariffs on citrus juices, currently as high as 25%, would be phased out in five to eight years.

Japan would get rid of its orange import tariffs within six to eight years.

As for Malaysia, tariffs for oranges and citrus juices are locked in at 0%, and duty on grapefruit and lemons would be eliminated immediately.

Peru's import tariffs for citrus fruit and juices are set to be phased out by 2018 under an existing trade agreement.

Florida tops the list of U.S. citrus-growing states, followed by California, Texas and Arizona.

Vegetables - Fresh and Processed (Excluding Potatoes)

Taking a look at vegetables, Japan would eliminate 'nearly all' tariffs for fresh and processed produce within 11 years, according to the USDA.

Vietnam's vegetable import tariffs, which are currently as high as 40%, would be phased out along the same timeline as Japan.

The biggest benefit for vegetable exporters, however, comes by way of Malaysia, which would eliminate its staggering import tariff of 90% with immediate effect.

California is the largest vegetable-growing state in the U.S., followed by Florida, Washington, Idaho and Arizona.

Potatoes and Potato Products

In terms of potatoes, Japan would get rid of its 8.5% tariff on frozen French fries in four years, while the 20% duty on dehydrated potatoes would be eliminated in six years.

Vietnam's tariffs, which are currently as high as 34%, would be eliminated within six years as well, and Malaysia would eliminate its 8% duty immediately.

Photo: www.shutterstock.com


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