Business

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

Along with some Spanish olive oils, certain types of table olives from both France and Spain will also face a 25-percent tariff on U.S. imports. Olive oils from Italy, Portugal and Greece will be unaffected.

Freighter off Valencia, Spain
Oct. 3, 2019
By Daniel Dawson
Freighter off Valencia, Spain

Recent News

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.

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.- Joseph R. Pro­faci, NAOOA

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.

See more: Olive Oil Trade News

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.”

This is a devel­op­ing story last updated on ET. Please check back for updates.







Related News