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Trade Deal Would Remove Tariff Imbalance for U.S. Olive Oil Producers

As American olive oil producers continue efforts to expand the market for their products, the Transatlantic Trade and Investment Partnership would provide significant relief to exporters.

Dan Mullaney, Chief US Negotiator for the Transatlantic Trade and Investment Partnership (TTIP), and Ignacio Garcia Bercero, Chief EU Negotiator for the TTIP
May. 5, 2016
By Sukhsatej Batra
Dan Mullaney, Chief US Negotiator for the Transatlantic Trade and Investment Partnership (TTIP), and Ignacio Garcia Bercero, Chief EU Negotiator for the TTIP

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The Transat­lantic Trade and Invest­ment Part­ner­ship (TTIP) con­cluded its most recent round of nego­ti­a­tions on April 29, 2016 in New York. A fit­ting place to have this meet­ing, as New York is a transat­lantic trade hub with goods amount­ing to about $400 mil­lion arriv­ing here daily from Europe. On the other hand, EU imports from the United States amount to more than $730 mil­lion every day.

A reduc­tion or elim­i­na­tion of tar­iffs would, for the first time, allow U.S. pro­duc­ers an oppor­tu­nity to offer Euro­pean con­sumers addi­tional choices in high-qual­ity extra vir­gin olive oil.- Kim­berly Hould­ing, Amer­i­can Olive Oil Pro­duc­ers Asso­ci­a­tion

The Transat­lantic Trade and Invest­ment Part­ner­ship was ini­ti­ated in 2013 to facil­i­tate the large exchange of goods such as food, cloth­ing, phar­ma­ceu­ti­cals, chem­i­cals, and even cars on both sides of the Atlantic.

The pur­pose of the TTIP is to address global issues, increase jobs, and encour­age eco­nomic growth and inter­na­tional com­pet­i­tive­ness through increased trade and invest­ment between the United States and the Euro­pean Union.
See more: Trade Com­mis­sion Releases Report on U.S. Olive Oil Com­pet­i­tive­ness
Since the launch of the part­ner­ship, the TTIP has had numer­ous nego­ti­a­tions in an attempt to meet its goals, which, accord­ing to press state­ment at the close of the TTIP talks in Brus­sels in Feb­ru­ary 2016, is one of the most ambi­tious trade agree­ment in his­tory. The aim is to bridge, where pos­si­ble, reg­u­la­tory diver­gences and pro­mote greater reg­u­la­tory com­pat­i­bil­ity — all with­out low­er­ing the envi­ron­men­tal, health and safety pro­tec­tions that our cit­i­zens have come to expect.”

In his address dur­ing the lat­est nego­ti­a­tions, chief US nego­tia­tor Daniel Mul­laney said, TTIP will not only elim­i­nate tar­iffs, sim­plify pro­ce­dures, cut red tape and bridge dif­fer­ences in our reg­u­la­tory sys­tems to the eco­nomic ben­e­fit of con­sumers, work­ers and busi­nesses alike: it will also have a valu­able strate­gic ben­e­fit as well.”

The TTIP nego­ti­a­tions cen­tered on three major areas: mar­ket access, reg­u­la­tory coop­er­a­tion and estab­lish­ing rules.

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Under mar­ket access, the focus of the TTIP is on low­er­ing or elim­i­nat­ing cus­toms tar­iffs on both sides of the Atlantic. Reduc­ing tar­iffs would greatly ben­e­fit US farm­ers, con­sid­er­ing that the United States is the world’s largest exporter of agri­cul­tural goods. In 2013, US exported food and agri­cul­tural prod­ucts worth more than $145 bil­lion, of which $10 bil­lion were to the EU.

As Amer­i­can olive oil pro­duc­ers con­tinue efforts to expand the mar­ket for their prod­ucts, the Transat­lantic Trade and Invest­ment Part­ner­ship would pro­vide sig­nif­i­cant relief to exporters. At present, they pay $1,680 in duties per ton of olive oil shipped to EU, while EU pro­duc­ers only pay $34 per ton to the United States.

The break­down of tar­iffs for olive oil imported to the United States from the EU is $0.05/kg on con­tent and con­tainer weigh­ing less than 18 kilo­grams, a rate that decreases to $0.034/kg on weights over 18 kilo­grams. In con­trast, the EU tar­iff rates for less than 18 kilo­grams of olive oil imported from the United States is $1.57/kg net weight, which increases to $1.59/kg for higher vol­umes.

Fair mar­ket access for com­pet­ing prod­ucts from many coun­tries and pro­duc­ers is always the best way to empower con­sumers to choose what works best for them. This cer­tainly applies to extra vir­gin olive oil,” said Kim­berly Hould­ing, ‎the pres­i­dent and CEO of the Amer­i­can Olive Oil Pro­duc­ers Asso­ci­a­tion. With fair access, extra vir­gin olive oils from all over the world can be appro­pri­ately com­pared on vari­etal, qual­ity, fresh­ness, fla­vor and price. A reduc­tion or elim­i­na­tion of tar­iffs under the Transat­lantic Trade and Invest­ment Part­ner­ship would, for the first time, allow U.S. pro­duc­ers an oppor­tu­nity to offer Euro­pean con­sumers addi­tional choices in high-qual­ity extra vir­gin olive oil.”

In other areas, the TTIP aims to estab­lish reg­u­la­tory coop­er­a­tion that will mean uni­ver­sal rules and reg­u­la­tions that will cover all aspects of a prod­uct rang­ing from labels to prod­uct tests and safety. Finally, the TTIP also intends to estab­lish rules to pro­tect intel­lec­tual prop­erty, use of pro­pri­ety names and set­tle rules at the com­pany and national lev­els.

Refer­ring to the present meet­ing as a round of very intense period of nego­ti­a­tions,” the EU Chief Nego­tia­tor, Igna­cio Gar­cia Bercero, said that con­sumers and com­pa­nies would feel an imme­di­ate impact on prices of some prod­ucts.

A 2013 study con­ducted by the Cen­ter for Eco­nomic Pol­icy Research in Lon­don esti­mates that the TTIP could boost the EU econ­omy by 120 bil­lion Euros and the US econ­omy by 95 bil­lion Euros by 2027.

How­ever, it may be a while before the con­sumers and pro­duc­ers see changes in prices of imported goods. Accord­ing to Blomberg BNA in Jan 2016, the EU Ambas­sador to the US, David O’Sul­li­van said, TTIP could be con­cluded some­time in 2016 but prob­a­bly would not take effect until 2018.”


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