AMERICAN PEANUT PRODUCTS MANUFACTURERS, INC.
`1100 NEW JERSEY AVENUE, SE – SUITE 910
`WASHINGTON, DC 20003 PHONE: (202) 842-2345
`
`
`
`February 1, 2019
`
`
`Secretary
`U.S. International Trade Commission
`500 E Street, SW
`Washington, DC 20436
`
`RE:
`
`Investigations Nos. TA-131-045 and TPA-105-006, U.S.-UK Trade Agreement: Advice
`on the Probable Economic Effect of Providing Duty-free Treatment for Currently
`Dutiable Imports
`
`
`
`The American Peanut Product Manufacturers, Inc. (APPMI) looks forward to a new trade
`relationship with the United Kingdom. The UK already is a valuable U.S. trade partner and we
`are encouraged by the prospect of enhancing the relationship between our countries. APPMI
`supports expanded trade because it means greater exports and more jobs for Americans.
`
`We strongly support the efforts of the U.S. Trade Representative to achieve substantial
`improvements in market access in these negotiations. APPMI believes the U.S.-UK Trade
`Agreement presents a new opportunity to boost long-term economic growth in the British
`market.
`
`APPMI represents companies that manufacture peanut products in the United States, including
`peanut butter and peanut confectionery. We appreciate the opportunity to provide background
`information on U.S.-UK peanut trade and discuss peanut product export opportunities into the
`United Kingdom.
`
`As the U.S. enters negotiations with the UK, our immediate concern is the additional 25% duty
`that the EU has imposed on U.S. peanut butter last summer, which has dramatically reduced
`peanut butter exports to the EU. Removing this onerous tariff by the UK would provide
`welcome relief to U.S. peanut manufacturers, shellers, and growers.
`
`Annual world peanut production averages about 29 million metric tons cultivated on over 60
`million acres. Approximately 1.25 million metric tons of peanuts are exported worldwide each
`year. The United States is the world’s third largest peanut producer (after China and India) with
`annual exports between 200,000 and 250,000 metric tons. In 2017, total U.S. peanut exports to
`all markets were valued at $491 million.
`
`The United Kingdom is a significant market for U.S. peanut products because it’s the second
`largest consumer of peanuts in Europe (after Germany) with total consumption of 85,000 metric
`tons annually. Total revenue from the UK peanut butter segment was $115 million in 2018 with
`UK consumption at two-thirds of a pound per person. The UK peanut butter market is expected
`to grow by 5.8% annually.
`
`
`
`
`
`

`

`Page 2
`
`The outlook for the consumption of peanuts and peanut products in the UK is clearly positive
`with stable growth expected. In the long term, the UK market for peanuts is expected to
`gradually increase and U.S. peanut growers, shellers and manufacturers want to play a key role
`in that growth. A driving factor is an increased interest in healthy eating, since peanuts are a
`source of protein, fiber, vitamins, minerals, and unsaturated fats. Increased demand may also be
`driven by changes in consumption patterns of UK consumers, who seek a variety food options
`and vegetable sources of protein, which may push peanut and peanut product consumption.
`
`Demand for peanuts in the UK has been steady, although the competition in the market could be
`enhanced by lowering trade barriers that exist under the current EU trade regime. The amount of
`direct peanut and peanut product imports into the UK from the U.S. are likely to increase under a
`new trade agreement (as the amount of peanuts through intermediary countries, such as The
`Netherlands decline).
`
`The leading developing country suppliers of peanuts to Europe are Argentina, followed by China
`and Brazil. However, China is on its way to becoming an importer due to increasing domestic
`demand. Chinese peanut exports have almost halved to 500,000 metric tons over the past
`decade, while imports have risen 50%. This trend can offer opportunities to the U.S. peanut
`industry to increase its share of the UK market.
`
`Current European Union tariffs of interest (and possibly soon to be UK tariff lines) to the U.S.
`peanut sector are set forth with tariff rates below.
`
`
`Current EU Tariff Lines for Peanuts/Peanut Products & EU Duty on U.S. Imports
`
`
`Tariff Rate
`
`
`
`
`Tariff Line Product Description
`2008110000 Nuts, peanuts and other seeds, whether or not mixed together
`
`
`in immediate packings of a net content not exceeding 1 kg 10.2%
`2008111000 Peanut butter
`
`
`
`
`
` 12.8%
`2008119100 Prepared or preserved peanuts in packing larger
`
`than 1 kg net
`
`
`
`
`
`
`2008119600 Roasted peanuts in packing smaller than 1 kg net
`2008119800 Other prepared or preserved peanuts in packing smaller
`than 1 kg net
`
` 12.8%
` 12.0%
` 12.8%
`
`
`
`
`
`
`
`
`
`
`
`Market access restrictions in the form of tariffs limit the ability to export U.S. peanut products to
`the European market. Current EU tariffs on U.S. peanut products range for 10.2% to 12.8%. EU
`peanut butter tariffs are 12.8%, while roasted peanut products face a tariff of 10.2%. In contrast,
`the EU provides preferential tariff treatment on peanut products for a number of countries. For
`example, South Africa is able to export peanuts to the EU without paying any duty.
`
`Liberalized agricultural and food trade between the two significant consumer blocks will help
`boost the economies of both the United States and the United Kingdom. The United States is a
`net exporter of peanuts and peanut products, so it benefits from reduced trade barriers.
`
`
`
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`

`

`
`
`Page 3
`
`The UK represents a valuable market for U.S. peanut products as outlined below, which shows
`the total value at more than $20 million annually:
`
`
` U.S. Peanut Exports to the UK by Value (millions) & Quantity (metric tons)
`
`
`2016
`
`Value Quantity
`$18.8 16,376
` 4.4 1,067
` 3.0 1,648
` 0.9 1,049
` 1.2 309
` 0.8 698
`
`
`2015
`
`Value Quantity
`$12.0 9,796
` 5.3 1,272
` 4.1 2,877
` 1.4 1,311
` 0.7 190
` 0.8 714
`
` 2017
`Value Quantity
`$12.5 10,854
` 4.2 1,023
` 1.6 1,083
` 1.7 2,039
` 0.9 247
` 0.5 398
`
`
`
`
`
`
`Product
`
`Shelled peanuts
`
`Peanut butter
`
`Blanched peanuts
`
`Peanut oil
`
`Prepared/preserved peanuts
`Inshell peanuts
`
`
`Total
`
`The U.S.-UK Trade Agreement negotiations should aim to immediately eliminate or phase out
`all tariffs on U.S. peanuts and peanut products. APPMI believes that these negotiations could
`lead to real economic benefits if the United Kingdom commits to fully liberalizing trade by
`eliminating its tariffs on U.S. peanuts and peanut products.
`
`
`
`
`
`
`$24.4 16,160
`
`$29.1 21,147
`
`$21.4 15,647
`
`Sincerely,
`
`
`
`
`
`Richard Pasco
`Executive Director
`
`
`
`
`
`