NPC COMMENTS ON ADDITION OF FROZEN POTATOES ON GSP LIST
Published online: Jun 01, 2009
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On May 20, the National Potato Council (NPC) submitted a letter to the U.S. Department of Agriculture (USDA) in response to their request for comments on the recently announced proposal to include frozen potatoes (HS 0710.10) in the list of products that would be included in the U.S. Generalized System of Preferences (GSP) benefits.
On January 15, the United States International Trade Commission (USITC) issued a report stating there would be minimal economic impact to allowing all 134 GSP eligible countries duty-free access to export frozen potatoes (HS 0710.10.00; Potatoes, uncooked or cooked, frozen) to the U.S. The current tariff for this tariff line is 14%.
The National Potato Council expressed their disagreement with the USITC's assessment and is opposed to the inclusion of this tariff line. A few of the reasons listed in the letter were: 1) Competitive Nature of Frozen Potato -- the frozen potato business is incredibly competitive. Differences of pennies can result in changes of suppliers; 2) Fry processing within GSP countries -- several of the GSP countries have major frozen potato processing facilities. U.S. fries directly compete against potatoes made in these facilities in third markets. NPC does not believe these factories need the added advantage of duty-free market access to the U.S.; 3) Precedent from Other Commodities -- Duty-free access for asparagus was unilaterally provided to Peru in the early 1990's as part of the war on drugs effort. This eliminated the asparagus industry in Washington at the cost of hundreds of jobs. Canned fruit processors in California and the Northwest are also struggling because of duty-free imported canned fruit from South Africa entering the market through the African Growth and Opportunity Act (AGOA).