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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

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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.

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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.”

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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.”

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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.

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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.