BackgroundEighteen per cent of U.S. annual potato production is exported in the form of fresh or frozen processed potatoes. High tariffs, restrictive tariff-rate quotas, trade-distorting foreign subsidies, and scientifically unjustified phytosanitary restrictions can impede access for U.S. potato exports in some markets. Fair access to foreign markets and non-restrictive tariff levels are essential to the continued growth and prosperity of the potato industry.
The Council works to support the U.S. government’s participation in a variety of trade negotiations. To this end, NPC supports continuing multilateral trade negotiations in the World Trade Organization, and bilateral and regional free trade agreement negotiations with countries that offer meaningful market opportunities for U.S. potato products.
Market Access Program (MAP)
NPC supports and encourages Congress to fund the Market Access Program (MAP), which benefits the potato industry through export programs administered by the United States Potato Board (USPB). MAP funds help promote the export of U.S. frozen potato products, dehydrated potatoes and fresh potatoes to Japan, China, Korea, Mexico, Central America, Taiwan, Thailand, the Philippines, Malaysia, Singapore, Indonesia, Hong Kong, and Vietnam and seed potatoes in Latin America and Africa. The potato industry is able to complement the MAP program activities with funding from the Quality Samples Program, Emerging Markets Program, Cochran Program, and Technical Assistance for Specialty Crops program under a strategically driven unified export strategy that develops markets for U.S. potatoes and works to overcome barriers to trade.
Trans-Pacific Partnership (TPP)
NPC is currently encouraging the completion and adoption of the Trans-Pacific Partnership (TPP), a multilateral trade pact being negotiated between Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. U.S. potato industry leaders applauded the June 2012 inclusion of Mexico and Canada in the negotiations since it will create expanded opportunities for the export of U.S. potatoes. Collectively, U.S. potato exports to the original eight countries included in TPP negotiations totaled approximately $78 million in 2010. The U.S. potato industry estimates that increased exports to the Mexican fresh potato market alone could provide an additional market potential of $150 million per year, up from the current $39 million per year in exports.
Korea-U.S. Free Trade Agreement
In 2011, NPC celebrated the completion of important free trade agreements (FTAs) between the United States and South Korea, Colombia, and Panama. In 2012, the Korea-U.S. Free Trade Agreement went into effect, resulting in the elimination of the 18 percent tariff on U.S. frozen potatoes. South Korea is the fourth largest and fastest-growing market for U.S. frozen potatoes. In 2011, U.S. potato growers exported $54 million worth of frozen product to South Korea, an increase of 15 percent over 2009.
When implemented, the U.S.-Colombia FTA will eliminate the current 20 percent tariff on U.S. frozen and dehydrated potatoes and potato chips. Colombia is the third-largest economy in Central and South America and is an important market for the United States. The FTA is expected to result in an annual export market for U.S. potatoes and potato products of $5 to $10 million per year.
The U.S.-Panama FTA will result in the phased five-year elimination of the existing 20 percent tariff on U.S. frozen potato exports. The implementation of the FTA will open a $10 million market for frozen potato exports from the United States. In 2010, U.S. frozen French fry exports to Panama grew by 77 percent in value and 93 percent in volume from 2009 due, primarily, to the growth of quick service restaurants (QSRs).