Exports are a critical source of growth for potato growers, Commerce Secretary Carlos M. Gutierrez said at the National Potato Council public policy conference in Washington, D.C.
He said trade is an increasingly important segment of the U.S. economy, with 2007 being another record-breaking year with $1.6 trillion in exports, up 12.2 percent over 2006.
“We also have a surplus in agriculture exports—31 percent of agricultural products were exported—over $90 billion last year,” Gutierrez said.
He noted that while potato consumption in the U.S. has actually decreased since 2003—from 138 pounds a person to 126 pounds last year—in the same period exports of potato and potato products were up 62 percent in value.
Gutierrez said that free trade agreements (FTA) are the best way to help exporters break into new markets.
“That’s why pending FTAs with Colombia, Panama and South Korea are so critical,” he said. “These three countries combined represent more than $1 trillion in GDP and 100 million potential consumers for American products.”
Gutierrez said the pending FTAs will open more markets for American potatoes.
“For example, we’re already the largest supplier of agricultural products to South Korea,” he said. “Under the FTA there will be even more opportunities.
“Frozen potatoes, which currently have an 18 percent tariff, will enter duty free immediately. Fresh and dehydrated potatoes which have duties up to 300 percent going into South Korea will see quotas and duties reduced to zero with full implementation.”
Gutierrez also indicates Colombia is another important market.
“Potato tariffs range as high as 20 percent,” he said. “With an FTA, however, all fresh and nearly all processed potatoes will immediately enter duty-free.”
At the conference, Gutierrez warned that a shift away from free trade would be devastating for American businesses, families and economy.
“Many countries would have duty-free access in countries where we would pay a duty,” he says.
The European Union has at least 15 FTAs, and is negotiating many more, including with South Korea, India and Mercosur. Canada has five FTAs and eight under negotiation, including with Colombia and South Korea. China has at least six FTAs and is negotiating with dozens more countries and regions. India is negotiating with South Korea, while Japan is negotiating with South Korea and India.
“Our retreat would send a message—that the world’s biggest economy is no longer the world’s leading economy,” Gutierrez says. “Make no mistake—taking a ‘timeout’ on trade is a retreat. With the world moving forward, standing still would make us fall behind,” he said.
“It’s our responsibility to lead. These agreements are a bellwether for future agreements and trade liberalization—and that impacts our national competitiveness.”