Spanish Olive Oil on Final List of Retaliatory Tariffs on E.U. Goods

Summary

The United States Trade Representative (USTR) has pub­lished a list of retal­ia­tory tar­iffs on European Union imports, seek­ing approval from the World Trade Organization (WTO) for addi­tional duties on $7.5 bil­lion worth of E.U. goods, includ­ing a 25 per­cent tar­iff on some Spanish olive oils and table olives start­ing October 18. The deci­sion not to impose tar­iffs on olive oils from Italy, Greece, Portugal, and France, as well as bulk olive oils from Spain, was wel­comed by the North American Olive Oil Association (NAOOA) as a pos­i­tive devel­op­ment for American con­sumers.

The United States Trade Representative (USTR) pub­lished its com­plete list of retal­ia­tory tar­iffs on European Union imports on Wednesday.

The USTR will sub­mit the list, which includes addi­tional duties on $7.5 bil­lion worth of E.U. goods, to the World Trade Organization (WTO) for approval on October 14. The WTO’s final deci­sion can­not be appealed.

Starting October 18, imports of some Spanish olive oils as well as cer­tain types of Spanish and French table olives will face a 25 per­cent tar­iff. Olive oil and table olive imports from other E.U. coun­tries will not be affected.

Imports of Spanish vir­gin and non-vir­gin olive oil in all of its frac­tions in con­tain­ers of less than 18 kilo­grams (39.7 lbs) will be sub­ject to the tar­iff. Pitted and unpit­ted green olives in saline solu­tion from both Spain and France will also be hit with the American coun­ter­mea­sures.

The tar­iffs stem from a WTO deci­sion ear­lier this year, rul­ing that the U.S. could retal­i­ate against cer­tain E.U. mem­ber states for their ille­gal sub­si­dies to plane man­u­fac­turer Airbus. The WTO ruled that these sub­si­dies hurt rival American man­u­fac­turer Boeing.

Originally the USTR said it wanted to impose a 100 per­cent tar­iff on $15 bil­lion of goods. However, the WTO ruled that the U.S. could only impose coun­ter­mea­sures on half of this amount.

Joseph R. Profaci, the exec­u­tive direc­tor of the North American Olive Oil Association (NAOOA), a trade group that peti­tioned the gov­ern­ment against the tar­iffs, told Olive Oil Times that the lim­ited expo­sure of olive oil to the American coun­ter­mea­sures comes as rel­a­tively good news for importers and con­sumers.

“The fact that USTR decided not to impose tar­iffs on any olive oils imported from Italy, Greece, Portugal or France, nor on bulk olive oils imported from Spain, is cer­tainly wel­come news for American con­sumers,” he said. ​“The USTR appar­ently heard our con­cerns about the health ben­e­fits of olive oil and the crit­i­cal role Europe plays in meet­ing demand in the U.S.”

Profaci added that while the 25 per­cent tar­iff on pack­aged Spanish olive oil will still have an adverse impact on importers and con­sumers, the USTR’s deci­sion to not impose the full 100 per­cent tar­iff is a good sign for the indus­try.

“I am opti­mistic that USTR’s deci­sion to limit the tar­iffs to 25 per­cent instead of the 100 per­cent (which would be within its rights under WTO rules) is a good faith indi­ca­tion of its desire to nego­ti­ate a set­tle­ment with the E.U.,” he said. ​“We will be doing what we can to facil­i­tate such a set­tle­ment to get all olive oil off the list.”

According to data from Eurostat, Spain has already exported 104,705 tons of olive oil to the U.S. in the 2018/19 mar­ket­ing year, which rep­re­sents about one-third of all American olive oil imports. Meanwhile, the rest of the E.U. has exported a com­bined 92,700 tons of olive oil to the U.S. this mar­ket year.

Spain’s Association of Young Farmers and Ranchers (ASAJA) has called on both their gov­ern­ment and the European Commission to apply pres­sure to the U.S. in order to try and avoid the imple­men­ta­tion of tar­iffs.

In a rare pub­lic state­ment, Pedro Barrato, the pres­i­dent of ASAJA, crit­i­cized the WTO’s deci­sion and said it was absurd that agri-food prod­ucts should bear the brunt of American retal­i­a­tion on air­craft sub­si­dies.

“We can­not allow our agri­cul­ture to be a cur­rency in trade agree­ments with third coun­tries,” he said. ​“It is para­dox­i­cal that it was decided to sanc­tion agri-food pro­duc­tions with a 25 per­cent tar­iff as a result of com­mu­nity sub­si­dies to Airbus and the tar­iff for aero­nau­ti­cal prod­ucts is only 10 per­cent.”

While some olive oil pro­duc­ers in Spain will be breath­ing a sigh of relief that the tar­iffs were not as bad as they could have been, Spanish olive grow­ers will be hit sig­nif­i­cantly harder. Table olive pro­duc­ers in Spain have already lost an esti­mated $50 mil­lion in rev­enue from uni­lat­eral tar­iffs that the U.S. imposed on Spanish black olive imports last year.

The Olive Growers Council of California applauded the USTR for includ­ing Spanish and French green olives on its list. Mike Silveira, the chair­man of the OGCC, said that the deci­sion under­scored the U.S. gov­ern­men­t’s com­mit­ment to California’s table olive pro­duc­ers.

“The retal­ia­tory tar­iffs announced [Wednesday]… fur­ther under­score the Administration’s con­tin­ued com­mit­ment to strong trade enforce­ment, and, in the case of olives, help pro­tect the integrity of the U.S.-grown-and-processed ripe olive indus­try,” he said.

However, Cecilia Malmström, the out­go­ing European trade com­mis­sioner, warned that the U.S. should be care­ful how they imple­ment their tar­iffs. The WTO is set to make a sim­i­lar rul­ing later in the year, which many expect will allow the E.U. to impose its own tar­iffs on the U.S. for ille­gal sub­si­dies pro­vided to Boeing.

“Applying coun­ter­mea­sures now would be short-sighted and coun­ter­pro­duc­tive,” Malmström said. ​“In the par­al­lel Boeing case, the E.U. will in some months equally be granted rights to impose coun­ter­mea­sures against the U.S. as a result of its con­tin­ued fail­ure to com­ply with WTO rules.”

• United States Trade Representative


• ASAJA Jaén


• European Commission