Business

Spanish Olive Farmers Concerned Over Possible 'Protectionist' US Measures

European table olive producers are growing concerned over the possibility of facing harsh measures as soon as September.

Aug. 8, 2017
By Reda Atoui

Recent News

The U.S. Department of Commerce has recently launched an inves­ti­ga­tion to deter­mine whether or not Spanish olive farm­ers are dump­ing their prod­ucts in the US market on top of being unfairly favored by the Common Agricultural Policy program’s sub­ven­tions and thus vio­lat­ing fair trade laws. European table olive pro­duc­ers are grow­ing con­cerned over the pos­si­bil­ity of facing harsh pro­tec­tion­ist mea­sures being read­ied as soon as of September of this year.

On June 22, 2017, the Coalition for Fair Trade in Ripe Olives (CFTRO) filed a peti­tion regard­ing pos­si­ble dump­ing and unfair sub­si­diza­tion prac­tices being con­ducted in Spain in favor of domes­tic olive pro­duc­ers. The Coalition’s mem­bers include the American com­pa­nies Bell-Carter Foods and Musco Family Olive Co., respec­tively the largest American table olive pro­ducer and lead­ing table olive sup­plier.
See more: USITC Holds Hearing on Olive Oil Market Conditions

The two com­pa­nies claimed Spanish table olive pro­duc­ers have been sell­ing at lower prices in the U.S. than their prices in Spain. “Dumped and sub­si­dized Spanish ripe olives are severely impact­ing our indus­try,” said the CEO of Bell-Carter Foods, Tim Carter.

Dumping, which is viewed as a means to hurt American pro­duc­ers, is ille­gal under U.S. law. Moreover, the CFTRO’s mem­bers have denounced the fact that Spanish olive pro­duc­ers have been receiv­ing sub­stan­tial finan­cial aid from the European Union’s Common Agricultural Policy (CAP) pro­gram, a sub­sidy for European farm­ers that their American coun­ter­parts have claimed skews the play­ing field even more.

The U.S. International Trade Commission has been con­duct­ing an offi­cial inves­ti­ga­tion to ponder the legit­i­macy of the CFTRO’s peti­tion since July 22, 2017. If the gov­ern­ment does uncover unfair prac­tices through dump­ing and sub­si­diza­tion it could announce sanc­tions on Spanish table olive imports as soon as September of 2017.

Advertisement

An offi­cial state­ment from the Department read: “If the ITC deter­mines that there is a rea­son­able indi­ca­tion that imports of ripe olives from Spain mate­ri­ally injure, or threaten mate­r­ial injury to, the domes­tic indus­try in the United States, the inves­ti­ga­tions will con­tinue, and the Department will be sched­uled to announce its pre­lim­i­nary coun­ter­vail­ing duty (CVD) deter­mi­na­tion in September 2017 and its pre­lim­i­nary antidump­ing (AD) deter­mi­na­tion in November 2017, though these dates may be extended. If the ITC’s deter­mi­na­tions are neg­a­tive, the inves­ti­ga­tions will be ter­mi­nated.” An exhaus­tive sched­ule of the inves­ti­ga­tion is avail­able on the Department of Commerce’s offi­cial web­site.

The threat of eco­nom­i­cal penal­iza­tion has loomed over the Spanish table olive indus­try since Bell-Carter Foods and Musco Family Olive Co. filed the offi­cial peti­tion. And with reason. The two American com­pa­nies have sug­gested imports of Spanish olives should be taxed at a rate of 73 per­cent, to be even­tu­ally increased as high as 223 per­cent. Such fig­ures have pushed Copa-Cogeca, a lead­ing European asso­ci­a­tion of farm­ers and agri-coop­er­a­tives, to qual­ify them as “pro­tec­tion­ist” mea­sures.

Copa-Cogeca Secretary General Pekka Pesonen declared in a letter sent on July 25 to Agriculture Commissioner Phil Hogan, “Copa and Cogeca con­sider it unac­cept­able that the main EU agri-food export market – the USA – can impose pro­tec­tion­ist mea­sures against our prod­ucts with­out jus­ti­fi­ca­tion,” he wrote.

Advertisement

“Copa and Cogeca argue that the only reason Spanish pro­duc­ers can pro­duce black table olives so com­pet­i­tively is due to their efforts to reduce pro­duc­tion costs, com­bined with invest­ment in key issues like qual­ity tech­nol­ogy,” he added.

Copa-Cogeca has fiercely denied the claims of unfair eco­nomic prac­tices and has stated that impos­ing high taxes on Spanish olive imports would con­sti­tute an unfair treat­ment of Spanish pro­duc­ers and claim they have always respected fair trade laws set by the World Trade Organization.

Advertisement

Last year, Spanish pro­duc­ers exported nearly 32,000 tons of olives to the United States with a value of $70.9 mil­lion.