Iowa corn farmers and hog producers could see significant new business from a developing trade deal with Peru, according to Iowa Senator Chuck Grassley. He says the agreement with that nation on the western coast of South America is the subject of a hearing before the Senate Finance Committee today.
"This is something that the American Farm Bureau Federation says is a very, very good deal for farmers, but it’s also a good deal for manufacturing and for our services," Grassley explains. Grassley says these so-called "free trade" deals can prove extremely beneficial for American producers. As an example, he says the Central American Free Trade Agreement, or CAFTA, was enacted in 2005 and has brought remarkable success. CAFTA was designed to remove trade barriers between the United States and Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and the Dominican Republic.
Grassley says: "In the two years that we’ve had a trade agreement with them, we’ve gone from a trade deficit with those countries to a trade surplus with those countries. That says anything better than I can say about what free trade agreements do. We can expect the same turnaround with Peru." He says the trade deal agreement that has been negotiated with Peru.
This Senate hearing is the first step in the implementation process. Grassley says it will level the playing field with Peru and could bring Iowa farmers and livestock producers a large new market. Grassley says: "We should see an average 18-percent duty currently placed on U.S. agriculture food imports disappear. Corn exports to Peru are expected to double. The National Pork Producers predict we’ll see an increase in U.S. hog prices by 83-cents per head."
He says the Farm Bureau Federation predicts the total increase of U.S. farm exports could be more than 700-million dollars through this agreement with Peru.