`E.U. Threatens to Impose Retaliatory Tariffs on U.S.

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E.U. Threatens to Impose Retaliatory Tariffs on U.S.

Jun. 12, 2020
Daniel Dawson

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The Euro­pean Union Com­mis­sioner for Trade has said that the 27-mem­ber bloc may impose retal­ia­tory tar­iffs on the United States, pend­ing a deci­sion from the World Trade Orga­ni­za­tion (WTO).

We are wait­ing to see the out­come of the Boe­ing panel,” Phil Hogan told a press con­fer­ence after an E.U. trade sum­mit. We will know this result in early July. Let’s wait and see the out­come first of all because I can­not antic­i­pate what this out­come will be.”

In my opin­ion, retal­ia­tory mea­sures are not good for any­one. I think that a nego­ti­a­tion should be started between the U.S. and E.U. to remove these addi­tional tar­iffs on Span­ish olive oil.- Rafael Pico Lapuente, exec­tive direc­tor, Aso­liva

Cer­tainly in the absence of a nego­ti­ated set­tle­ment, there will be strong pres­sure by mem­ber states to ensure that the impact of this award will be imple­mented,” he added.

The U.S. and E.U. have been locked in a 15-year-long dis­pute, each one accus­ing the other of pro­vid­ing ille­gal sub­si­dies to their respec­tive air­craft man­u­fac­tur­ers, Boe­ing and Air­bus.

See more: Trade News

Last Octo­ber, the WTO ruled that the U.S. could impose $7.5 bil­lion worth of tar­iffs on goods imported from the E.U. as a result of its ille­gal sub­si­dies to Air­bus. Included on the final list of U.S. tar­iffs were pack­aged Span­ish olive oils and table olives from both Spain and France.

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In April, the WTO ruled in favor of the E.U. in its own com­plaint about the U.S. pro­vid­ing ille­gal sub­si­dies to Boe­ing and awaits con­fir­ma­tion on what puni­tive mea­sures the bloc may take. The E.U. has pub­lished its own poten­tial list of tar­iff tar­gets, but carved out excep­tions for goods that include olives and olive oil.

While the four coun­tries that pro­vided the ille­gal sub­si­dies to Air­bus (the U.K., Ger­many, France and Spain) all have been tar­geted by the U.S. tar­iffs, Spain’s agri­cul­tural sec­tor has been hit par­tic­u­larly hard.

In recent days, pres­sure has been mount­ing in the coun­try for the E.U. to either impose retal­ia­tory tar­iffs on the U.S. or nego­ti­ate to remove olive oil from the list of tar­iffs.

In the seven months since the tar­iffs have come into force, Span­ish olive oil exports to the U.S. have plum­meted.

Accord­ing to data from the United States Trade Rep­re­sen­ta­tive, exports fell by 93 per­cent in the first quar­ter of 2020 (the last period for which data are avail­able), com­pared with the same period in 2019. This pre­cip­i­tous drop has resulted in a loss of rev­enues for the sec­tor of $85 mil­lion in the first three months of the year alone.

How­ever, Rafael Pico Lapuente, the exec­u­tive direc­tor of the Span­ish Asso­ci­a­tion of Olive Oil Export­ing, Indus­try and Com­merce (Aso­liva), said that he would pre­fer to see medi­a­tion over retal­i­a­tion.

In my opin­ion, retal­ia­tory mea­sures are not good for any­one,” Lapuente told Olive Oil Times. I think that a nego­ti­a­tion should be started between the U.S. and E.U. to remove these addi­tional tar­iffs on Span­ish olive oil, which are dis­crim­i­na­tory and unfair.”

Ear­lier in the year, the U.S. decided not to increase the 25-per­cent tar­iff cur­rently in place in Span­ish olive oils, but a lawyer for the USTR warned that the orga­ni­za­tion would recon­sider if the E.U. imposed tar­iffs on U.S. goods.





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