Potatoes Trade Agreement

The NPC represents the legislative, regulatory, environmental and trade interests of U.S. potato producers. U.S. potato production accounts for more than $3.7 billion a year and directly and indirectly supports hundreds of thousands of jobs. Patrick Hughes, ahDB`s head of potato export trade development, said a failure of a Brexit trade deal would end all UK potato exports to Europe, both seeds and goods. The USDA also projected that farmers will receive fewer direct payments this year, at $15 billion compared to $23.7 billion in 2019. The third and final round of payments from the USDA 2019 program to facilitate the market for producers suffering from trade retaliation from China and other countries is underway. Most of these exports were potato plants, most of which are grown in Scotland – although well-established aerthaton markets exist in Europe, Brexit remains a central concern of Scottish producers. “Today`s signing, which is on the heels of Japan`s new free trade agreement and the expected ratification of the USMCA, creates a business dynamic for our industry and creates the conditions for future enhanced market access, which could generate significant gains for U.S. producers,” said Jared Balcom, NPC Vice President for Business Affairs.

Mr Hughes said that once a trade agreement has been reached with Europe, potato producers will have to expect new tariffs on exporting their products. For example, Simmons cites South Korea. Canada entered into a free trade agreement with South Korea in 2015, but it did not contain access to potatoes. “We sought the support of federal public servants to do the work necessary to access this market,” she notes. “The U.S. potato industry has access to South Korea and provides more than $10 million in fresh potatoes each year. We would like to have similar access to this and other important and expanding export markets. Before we look at what might happen, we look at the current export of “Lay of the Land” potatoes among the nations involved. According to the International Trade Division of World Affairs Canada (GAC), Canada does not have a current trade agreement with TPP partners Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam. We already have agreements with Chile, Mexico and Peru (no tariffs), and of all our potato and potato products in the TPP countries, these three import the vast majority (95%) – an average of $1.2 billion per year in 2013, 2014 and 2015. This represents $176 million in potatoes and potato seeds, $363,000 for frozen potatoes and $1 billion for processed potatoes. On the import side, between 2013 and 2015, Canada imported an average of $325.2 million worth of potatoes and potato products from TPP partner countries. He added that the authorization “consolidates the trade benefits previously negotiated under the Trans-Pacific Partnership Agreement.” After its full implementation, the agreement will reduce tariffs on frozen and fried potatoes in the United States and eventually be eliminated.

We asked Brenda Simmons, vice-president of the Canadian Potato Council (CPC), which represents nearly 1,300 potato growers in Canada, for their thoughts on the potential benefits and possible deductions from the TPP and possible changes to NAFTA.