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Europe Challenges US Tariffs on Spanish Olives

The E.U. has filed a complaint with the World Trade Organization, but the short-staffed trade entity faces a massive backlog. Spanish olive producers face an uncertain future with a December 2019 deadline looming.

Photo courtesy of the WTO.
Feb. 7, 2019
By Daniel Dawson
Photo courtesy of the WTO.

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The Euro­pean Union is tak­ing legal action against tar­iffs imposed by the United States on Span­ish olive imports by seek­ing adju­di­ca­tion from the World Trade Orga­ni­za­tion.

We wel­come the deci­sion of the Euro­pean Com­mis­sion with great inter­est. The tar­iffs imposed on the Span­ish olives in the U.S. are not jus­ti­fied and go against the rules of the WTO.- José María Castilla Baró, rep­re­sen­ta­tive of Span­ish Farmer’s Union (ASAJA)in Brus­sels

The U.S. Depart­ment of Com­merce (DOC) imposed anti-dump­ing tar­iffs rang­ing from 16.88 to 25.50 per­cent and anti-sub­sidy tar­iffs rang­ing from 7.52 to 27.02 per­cent on Span­ish olives last July.

See more: Olive Oil Imports and Exports

The duties imposed by the United States on black olives from Spain are unjus­ti­fied, unwar­ranted and go against the rules of the World Trade Orga­ni­za­tion,” Cecilia Malm­ström, the Euro­pean Com­mis­sioner for Trade, said in a Tweet. Tomor­row, we are tak­ing this case to the WTO dis­pute set­tle­ment sys­tem, request­ing con­sul­ta­tions with the U.S.”

Under WTO rules, the two sides now have fewer than 60 days to try and set­tle the dis­pute. If the two sides can­not come to an agree­ment after that period of time, the E.U. may ask the WTO to make a rul­ing on the mat­ter.

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Malm­ström said that the E.U. has repeat­edly broached the sub­ject with U.S. trade offi­cials, but been unable to come to an agree­ment.

From the Com­mis­sion side, we have already raised this case with our U.S. coun­ter­parts at many occa­sions,” she said. Together with Span­ish author­i­ties, we will con­tinue to vig­or­ously defend the inter­ests of E.U. pro­duc­ers.”

Luis Planas, the Span­ish Min­is­ter of Agri­cul­ture, Fish­eries and Food, wel­comed the move after a meet­ing in Brus­sels with the Euro­pean Com­mis­sion.

It’s good news. The Euro­pean Com­mis­sion is tak­ing the unfair trade restric­tions that the table olives are suf­fer­ing to the WTO,” he said in a Tweet. The sec­tor deserves it. They have my total sup­port.”

The U.S. imported about $70 mil­lion of table olives from Spain last year.

The tar­iffs came about after two Cal­i­for­nia com­pa­nies filed an anti-dump­ing com­plaint with the U.S. Inter­na­tional Trade Com­mis­sion (ITC). This find­ing coin­cided with the con­clu­sions of a DOC inves­ti­ga­tion that said Span­ish olive grow­ers unfairly ben­e­fited from the Euro­pean Com­mon Agri­cul­tural Pol­icy (CAP), which pro­vides finan­cial aid to farm­ers.

Nei­ther the DOC nor the ITC have com­mented on the E.U.’s deci­sion to file a com­plaint with the WTO. How­ever, when the tar­iffs were first announced in July, an ITC spokes­woman said that both depart­ments had deter­mined Span­ish olives had a mate­r­ial advan­tage” over U.S.-grown olives, which is why the tar­iffs were imple­mented.

Accord­ing to the Span­ish Asso­ci­a­tion of Olive Exporters, table olive exports had already fallen by 72 per­cent just two months after the tar­iffs were for­mally imple­mented in August 2018.

José María Castilla Baró, who rep­re­sents the Span­ish Farmer’s Union (ASAJA) in Brus­sels, told Forbes that the CAP is in line with WTO rules.

We wel­come the deci­sion of the Euro­pean Com­mis­sion with great inter­est,” he said. The tar­iffs imposed on the Span­ish olives in the U.S. are not jus­ti­fied and go against the rules of the WTO.”

As olive grow­ers and exporters wait for the WTO rul­ing in antic­i­pa­tion, the Euro­pean Com­mis­sion has announced a grant total­ing €2.5 mil­lion ($2.85 mil­lion) for those affected by the tar­iffs in order to seek alter­na­tive mar­kets.”

Castilla Baró is happy for the sup­port and also opti­mistic that the E.U. will win the case, but as sev­eral trade experts have warned, it might not be so sim­ple.

The admin­is­tra­tion of U.S. Pres­i­dent Don­ald J Trump fun­da­men­tally opposes the idea of the WTO and, as a result, has already blocked the reap­point­ment of four of the organization’s seven appeals judges.

With only three judges left – the min­i­mum num­ber required for the orga­ni­za­tion to decide cases – the already back­logged appeals process is mov­ing slowly.

The terms of two more judges are also set to end in Decem­ber 2019 and, with the U.S. expected to block nom­i­na­tions to those posi­tions as well, experts pre­dict that Span­ish olive pro­duc­ers will be left with no solu­tions and hefty tar­iffs for the fore­see­able future.





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