<b>By ANN HINCH<br>
Assistant Editor</b> </p><p>

WASHINGTON, D.C. — With strong passage in both the U.S. House and Senate, the United States-Peru Trade Promotion Agreement awaits President Bush’s signature. Though it had not happened by press time, Matthew Beck, communications director for the House Committee on Ways and Means, expected Bush’s approval.</p><p>
Agricultural associations seem overwhelmingly supportive of the agreement’s passage, citing expanded opportunities for farmers to sell their goods in the Peruvian market. In fact, 45 ag and ag-related business organizations formed the Agriculture Coalition for Latin American Trade specifically to urge Congress to pass bilateral agreements between the U.S. and both Peru and Colombia.</p><p>
One member, the National Pork Producers Council (NPPC), called the agreement a “major victory,” adding it is expected to generate a seven percent increase in income for American pork producers because of higher value on hogs and immediate reductions in – and elimination of, after 10 years – import tariffs on goods going into Peru, as high now as 25 percent. The NPPC noted the agreement requires Peru to accept American meat inspection as equivalent to its own.</p><p>
The American Farm Bureau Federation and the National Corn Growers Assoc. (NCGA), also members of the coalition, applauded passage of the agreement. The NCGA stated it gives American corn growers a break on duties, noting that since the Andean Trade Preference Act of 1991, Peruvian imports into the U.S. have enjoyed “little or no tariffs.”</p><p>
“This (agreement) is essentially helping American manufacturers overcome getting into the Peruvian market,” Beck agreed, adding right now, approximately 90 percent of Peruvian goods coming into the U.S. are duty-free.</p><p>
The NCGA also noted a 1-cent increase in the value of a bushel of corn under the agreement and that tariffs on corn are to decrease immediately and drop altogether after 12 years, and believe this will open a new market for American distillers dried grains (DDG) producers.</p><p>

Cotton, wheat, dairy, cattle, poultry, eggs and other livestock were just some of the other goods represented by national organizations comprising the Ag Coalition. Even shipping and equipment interests were included.</p><p>
Opposing views</p><p>

Not everyone in agriculture, however, supports the agreement. The National Farmers Union (NFU), for example, is absent from the Ag Coalition roster. Jim Benham, an NFU board member and president of the Indiana Farmers Union (IFU) – a 1,250-member affiliate of the NFU – said while the NFU didn’t support the agreement, it did not oppose it heavily because it is working on Congressional matters it considers more crucial.</p><p>
“It’s a trade-off,” he said of Washington politics. “You pick your battles.”</p><p>
Benham said the IFU’s purpose is to “provide a better way of life for farmers” and other rural Hoosiers. He said the organization supports “fair trade, not free trade” and explained it is worried bilateral agreements such as this will have similar effects on the Indiana economy as IFU blames on NAFTA and CAFTA (North American and Central American free trade agreements, respectively).</p><p>
NAFTA was implemented in 1994. The IFU and the Indiana chapter of UNITE HERE – a union representing needletrades, textiles, industrial, hotel and restaurant employees – released a statement with data compiled from the U.S. Bureau of Labor Statistics showing Indiana alone has lost more than 44,000 manufacturing jobs since 1993.</p><p>
Further, the groups used an Economic Policy Institute study that claims more than 35,000 new manufacturing jobs could have been created in Indiana during that time “with balanced trade among NAFTA countries alone,” in addition to keeping the lost jobs.</p><p>
Benham, a Versailles, Ind., corn, soybean and tobacco farmer, said in the 1990s he favored free trade until he watched NAFTA “erode” the value of ag commodities to the point where U.S. farmers have to “squeeze out (higher) volume” to keep the same income.</p><p>
“Once you sell under cost, you’re at mercy,” he said, comparing the effect of NAFTA on the U.S. to a Wal-Mart opening in a small community, in that while shoppers enjoy lower prices, the local area may lose businesses that cannot compete on price, and jobs that cannot be recovered. “In the long run, you killed your community.”
Higher corn and soybean prices of late for farmers, he said, are offset by increasing input costs – 20 years ago, he said corn was more than $3 a bushel, too, but farming costs were much less.
Small farmers must either get off-site jobs to maintain their income – he also sells real estate – or become farmers of more acres. He pointed out the 1,000 acres he now plants supported five separate farm families in 1969.</p><p>
In addition, Benham said crop insurance is such that many small farmers could not financially survive a disaster because the cost of premiums and uncovered losses are so steep.</p><p>
Fairness debated</p><p>

The IFU and UNITE HERE criticized Rep. Brad Ellsworth (D-Ind.) for approving the agreement, saying he ran on a fair trade platform, and holding up a 2006 television ad criticizing his opponent, then-Rep. John Hostettler, for voting to expand NAFTA. Ellsworth’s press secretary, Elizabeth Farrar, said the ad was financed by the Democratic Congressional Campaign Committee and was neither authorized by Ellsworth nor featuring him.</p><p>
Further, Ellsworth believes this agreement is fair. “As I was considering the Peru trade agreement I talked to Indiana farmers, as well as business and labor leaders,” he stated. “With the Peru Trade Agreement, we’ve made great strides forward from the NAFTA/CAFTA model of trade by providing new, critical protections for labor and the environment (see related article). And I’ve been assured by leading labor organizations and independent trade studies that it would have little to zero impact on American jobs.”</p><p>
He said he will consider any future trade agreement on an individual basis.</p><p>
In the House’s 285-132 vote on the Peru agreement, 37 percent of the “ayes” were Democrats and in the Senate, 29 of the 77 “ayes” (to 18 totals “nays”) were Democrats. Very few Republicans voted against the measure.</p><p>
One such negative vote came from Rep. Pete Hoekstra (R-Mich.), who stated the agreement failed to correct measures in the 1991 Andean act “which resulted in a flood of cheap asparagus that displaced American growers and processors.” He added that fresh Peruvian asparagus imports have gone from four million to more than 87 million pounds since 1991, while Michigan asparagus acreage has decreased from 15,500 to 12,500 acres.</p><p>
“U.S. trade policy should promote mirror trade agreements that enable the U.S. to succeed in the free market economy,” Hoekstra said.