Potato Products and TPP: International Trade Commission’s report highlights benefits

A container ship in the Port of Seattle

The recently released U.S. International Trade Commission’s report on the potential economic impact of the Trans-Pacific Partnership (TPP) provides many examples of the benefits this free trade agreement would provide.

The National Potato Council (NPC) has previously touted the expanded trade opportunities and lowered tariffs that the agreement would ensure.

The International Trade Commission’s report confirms that lower tariffs on exports would allow potato growers and exporters to meet the rising demand in the Asia-Pacific region by making U.S. potatoes and potato products more competitive in those markets.

John Keeling, National Potato Council Executive Vice President and CEO:

“Where pennies in price can make the difference in which country makes the sale, reductions to tariffs faced by U.S. potato products in Japan and Vietnam will allow the industry to compete more effectively with our competitors.”

“The National Potato Council supports TPP and urges its passage before the next President of the U.S. takes office.”

From the ITC Report:

Effects of TPP on U.S. Exports of Processed Potatoes

Frozen French Fries are subject to global competition

For many processed foods, the elimination of high, and even moderate, tariffs would have positive effects on U.S. exports. Certain processed potato products face high to moderate tariffs in Japan and Vietnam, and their eventual elimination would result in the expansion of U.S. exports for these products.

U.S. annual exports of processed potato products were valued at more than $1.3 billion during 2013–15.324

A large subset of this category is frozen potatoes, including French fries, a sector in which the United States competes with the EU and Canada in global markets. Other large exporters, such as New Zealand and China, are seeking to expand market share in Asia. Tariffs on U.S. processed potatoes in TPP countries are primarily found in Japan and Vietnam.

Japan presently places tariffs of 8.5 percent on frozen French fries (HS 2004.10) and up to 20 percent on other dehydrated potato products (HS 1105.20, 2005.20). Japan’s TPP concessions for processed potatoes include full elimination in 11 years.

Vietnam’s tariffs, which range from 18 to 24 percent, would also eventually be eliminated under TPP.

Representatives of the U.S. potato industry estimate that elimination of Japanese tariffs on French fries (HS 2004.10) and dehydrated potatoes (HS 2005.20) alone would increase the value of Japanese imports of each product by at least $10 million annually.325

In light of rising demand and TPP tariff elimination, overall U.S. exports of frozen French fries to Vietnam would reach $10 million (from a 2014 level of $3.75 million) within 5 years.326

To access the full report or to review the references in the text above, use source link below.

Source: U.S. International Trade Commission’s report