WTO Rules in Favor of Spanish Producers in Table Olive Dispute

Summary

The World Trade Organization ruled that U.S. tar­iffs on Spanish ripe table olives are ille­gal due to mis­in­ter­pre­ta­tions of EU agri­cul­tural sub­si­dies, result­ing in a sig­nif­i­cant decrease in olive exports and finan­cial losses for Spanish pro­duc­ers. The U.S. Commerce Department has not yet com­mented on the rul­ing, and a sep­a­rate case regard­ing the basis of the tar­iffs is still ongo­ing in the U.S. court sys­tem.

The World Trade Organization has ruled that some tar­iffs imposed by the United States on imports of ripe table olives from Spain are ille­gal.

The tar­iffs were imposed by the U.S. Commerce Department in July 2018 after two California-based table olive pro­duc­ers lodged anti-dump­ing and anti-sub­sidy com­plaints. Depending on the com­pany involved, these tar­iffs ranged from 30 to 40-per­cent.

In its 146-page report, the WTO said the Commerce Department mis­in­ter­preted the rules gov­ern­ing the allo­ca­tion and val­u­a­tion of the European Union’s basic pay­ment scheme, which was the largest of the rural grants and pay­ments pro­vided to the farm­ing indus­try under the 2003 Common Agricultural Policy.

The WTO added that the Commerce Department had erro­neously con­tended that the basic pay­ment scheme and sin­gle pay­ment scheme, which pre­ceded it, were ​“explic­itly lim­ited to olive grow­ers” and that the ben­e­fit of those sub­si­dies went entirely to grow­ers who exported to the U.S.

However, the WTO also said the E.U. failed to demon­strate that the U.S. had vio­lated inter­na­tional trade law through the appli­ca­tion of its anti-dump­ing tar­iffs. As a result, the WTO said these may stand.

“The Commission’s efforts to vig­or­ously defend the inter­ests and rights of E.U. pro­duc­ers, in this case, grow­ers of Spanish ripe olives, are now pay­ing off,” said Valdis Dombrovskis, the Executive Vice-President and Trade Commissioner. ​“The WTO has upheld our claims about anti-sub­sidy duties being unjus­ti­fied and in vio­la­tion of WTO rules.”

“These duties severely hit Spanish olive pro­duc­ers, who saw their exports to the U.S. fall dra­mat­i­cally as a result,” he added. ​“We now expect the U.S. to take the appro­pri­ate steps to imple­ment the WTO rul­ing so that exports of ripe olives from Spain to the U.S. can resume under nor­mal con­di­tions.”

Neither the Commerce Department nor the International Trade Commission, both of which were involved with draft­ing and imple­ment­ing the tar­iffs, had com­mented on the WTO’s rul­ing at the time of writ­ing.

The European Commission said exports of ripe olives from Spain to the U.S. decreased almost 60-per­cent since the impo­si­tion of the tar­iffs. Prior to 2018, Spain exported about €67 mil­lion of table olives to the U.S. annu­ally.

According to the Spanish Association of Table Olive Exporters and Producers (Asemesa), black table olive pro­duc­ers in Spain have accu­mu­lated export losses of more than €150 mil­lion since July 2018.

While offi­cials at Asemesa cel­e­brate the WTO’s rul­ing on the unlaw­ful­ness of anti-sub­sidy tar­iffs, the organization’s atten­tion will soon return to a sep­a­rate case mak­ing its way through the U.S. court sys­tem.

In June 2021, the U.S. Court of International Trade ruled that the argu­ments used by the Commerce Department as the basis of the anti-sub­sidy and anti-dump­ing tar­iffs are ​“not in accor­dance with law.”

The Commerce Department was then given 90 days to sub­mit new evi­dence. The win­dow to sub­mit the evi­dence closed at the end of September. Once again, the depart­ment did not com­ment on whether it had resub­mit­ted.

• World Trade Organization
• European Commission