U.S.-Peru FTA

Timetable/Milestones

• Entered into force:  February 1, 2009
• Senate vote to implement agreement:  (77-18) on Dec. 4, 2007
• House vote to implement agreement:  (285-132) on Nov. 8, 2007
• Ratified by Peruvian Congress:  June 28, 2006
• Agreement signed by governments (Bush Administration):  April 12, 2006
• Negotiations concluded:  Dec. 7, 2005
• Negotiations began:  May, 2004
• Congressional notification of intent to negotiate:  Nov. 18, 2003

Peru Sugar Facts

• Production (Avg. 2005-2007): 734,333 metric tons 
• Consumption (Avg. 2005-2007):  913,667 metric tons
• Imports (Avg. 2005-2007): 228,333 metric tons 
• Exports: (Avg. 2005-2007):  48,000 metric tons

While Peru is a significant producer of sugar, it has in recent years generally been a net importer. Peruvian sugar production has averaged 872,000 metric tons over the past five years (2001/02-2005/6) while exports averaged 44,800 MT and imports, 92,800 tons; in 3 years of this period, Peru was a net importer.

Imported sugar from outside the Andean Community is subject to a basic duty of 20%.  Peru applies this tariff to imports of both raw and white sugar.  This represents the common external tariff for the Andean Customs Union.  Current tariff levels are well within Peru’s WTO tariff commitments, even when combined with the additional variable duty.

In addition to the basic tariff, Peru also operates the Andean Community’s price band systems, which provides an additional source of protection for domestic raw and refined sugar prices.  The protection offered by the import tariff and the price band system ensure that domestic prices remain significantly above world market levels.

Historical Access to U.S. Market

Under the minimum WTO tariff-rate quota requirement, the U.S. currently imports a minimum of  43,175 metric tons from Peru, which represents 3.86% of the total TRQ for 41 countries. 

Additional Access Granted to U.S. Market

 Access for an additional 11,000 MT is pending.  This represents an almost one-fifth increase in Peru’s exports to the U.S. under the minimum TRQ.  Peru’s preferential raw cane sugar quota would 2% each year, and the U.S. protective tariff on over-quota sugar would continue indefinitely (15.36 cents/lb. for raw, 16.21 cents/lb. for refined).

Peru would be permitted to ship sugar only if it has a net surplus.  This is expected to occur infrequently, in light of Peru’s sugar trade flows in recent years.

TARIFF AND TRQ SCHEDULE

(Specific Years Pending)