Asparagus Imports Under ATPA Have Displaced Some Domestic Production, but Consumers Have Benefited From Increased Availability

According to the U.S. International Trade Commission’s (ITC) 1999 study, ATPA has displaced an estimated 2 to 8 percent of the total value of domestic fresh asparagus production from what it would have been without the act. In addition, changes in consumer preference contributed to a downward shift in the domestic demand for processed asparagus. While imports from Peru have increased the supply of fresh asparagus in the United States, demand has been strong, as demonstrated by the increased per capita consumption of fresh asparagus. The decline in the consumption of processed asparagus particularly affects producers in Michigan and Washington, the two states that produce the majority of frozen and canned asparagus. Impacts on Producers and Consumers Likely to Continue With or Without ATPA

If ATPA is reauthorized, the producers of asparagus and, in particular, asparagus for processing will likely face some continued displacement from imports, but consumers can expect continued benefits from the year- round availability of fresh asparagus. Producers Face Continued Displacement, and Consumers Will Have Decreased Availability and Higher Prices if ATPA Is Not Reauthorized

Peruvian asparagus will likely remain a strong competitor for domestic producers even if ATPA is not reauthorized and the normal tariff is restored—5 percent in 2 of the 5 months when the majority of Peru’s fresh asparagus is imported and 21.3 percent in the other 3 months. Without ATPA, consumers would likely have decreased year-round availability of fresh asparagus and pay higher prices to the extent that the increase in tariff creates a reduction in imports from Peru. Under section 201 of the Trade Act of 1974, domestic industries can petition ITC to investigate whether increased imports have caused them serious injury or threat of serious injury.
What GAO Found

U.S. asparagus imports increased in the 1990s and now comprise nearly one-half of the asparagus consumed in the United States. Peru is the second largest source of imported asparagus and benefits from duty-free treatment under the Andean Trade Preference Act (ATPA). ATPA is estimated to have displaced between two and eight percent of the value of domestic production from what it would have been without the act. Although the supply of fresh asparagus from imports has increased since ATPA's enactment, consumer demand has been strong, and prices have risen. In addition, an apparent increase in consumer preference for fresh asparagus has contributed to a downward shift in the domestic demand for processed asparagus. Most of the decline in the domestic production of processed asparagus occurred in Michigan and Washington, the two states that produce most canned and frozen asparagus. If ATPA is reauthorized, domestic producers of asparagus and, in particular, asparagus for processing, will likely face continued displacement, but consumers can expect continued benefits from the year-round availability of fresh asparagus. However, some of this displacement will likely occur even if ATPA is not reauthorized and the normal tariff is imposed. If ATPA is not reauthorized, consumers would likely have decreased availability and pay higher prices to the extent that tariff increases reduce Peruvian asparagus imports and hence total asparagus supplies. Domestic industries can petition the U.S. International Trade Commission to investigate whether increased imports under the ATPA have caused them serious injury or threat of serious injury. If the Commission finds serious injury, it may recommend relief options to the President, including suspending duty-free treatment for imports.