`The USITC Investigation of the Olive Oil Market: Thoughts from Legal Experts - Olive Oil Times

The USITC Investigation of the Olive Oil Market: Thoughts from Legal Experts

Oct. 10, 2012
Peter Koenig

Recent News

The U.S. International Trade Commission (USITC) has launched a so-called §332 inves­ti­ga­tion into the global com­pet­i­tive­ness of the U.S. com­mer­cial olive oil indus­try. The inves­ti­ga­tion, Olive Oil: Conditions of Competition between U.S. and Major Foreign Supplier Industries, was requested by the U.S. House of Representatives Committee on Ways and Means and is dis­cussed in the USITC’s web site.

While its focus is broadly worded, the study is expected to con­sider the fol­low­ing: (1) the impact of olive oil imports into the United States from most notably Spain, Italy, and North African coun­tries (e.g., Tunisia) on the U.S. mar­ket and U.S. pro­duc­ers; (2) con­di­tions abroad faced by U.S. olive oil exporters; and, (3) prod­uct label­ing prac­tices and their mar­ket impact.

The USITC issues a report in §332 inves­ti­ga­tions, giv­ing its objec­tive find­ings and inde­pen­dent analy­ses on the sub­ject inves­ti­gated. The USITC makes no rec­om­men­da­tions on pol­icy or other mat­ters, or oth­er­wise takes any action, in these purely fact-find­ing inves­ti­ga­tions. Again, this is just a fact-find­ing inves­ti­ga­tion, itself hav­ing no direct trade impact (restric­tive or oth­er­wise).

But such §332 inves­ti­ga­tions are often fol­lowed by U.S. trade actions that can have a trade impact, includ­ing lim­it­ing imports. For exam­ple antidump­ing (AD) or coun­ter­vail­ing duty (CVD) inves­ti­ga­tions look at whether imports into the United States are sold at unfairly low prices due to dump­ing or gov­ern­ment sub­si­dies, which injure (or threaten to injure) a U.S. indus­try. If so, reme­dial AD/CVD import duties are imposed. Or a §332 inves­ti­ga­tion can lead to U.S. objec­tions to believed for­eign trade bar­ri­ers or unfair trade prac­tices (such as sub­si­dies), fol­lowed some­times with for­mal com­plaints filed at the WTO, or USTR §301 actions against the objected to for­eign prac­tices. All of the above have hap­pened before after U.S. §332 inves­ti­ga­tions. Section 332 inves­ti­ga­tions are not idly requested. They are requested for a purpose/objective.

It is note­wor­thy that trade press reports indi­cate that the global olive oil indus­try has been fac­ing a pric­ing cri­sis, with sales prices at below cost or rea­son­able lev­els, and pub­lic requests for sub­si­dies to sur­vive (e.g., in Europe). Such con­di­tions can lead to AD/CVD actions. Indeed they have as to olive oil in par­tic­u­lar in Peru, South Africa, Australia Argentina and Mexico — against European olive oil sub­si­dies (a num­ber of these actions failed for fail­ure to fol­low WTO AD/CVD rules). Domestic (U.S.) par­ties often pur­sue favor­able USITC §332 reports, and then cite those reports in fol­low up AD/CVD actions.


Also note­wor­thy, U.S. olive oil pro­duc­ers have sought prod­uct qual­ity label­ing stan­dards which could affect imports. The USITC is respon­si­ble for §337 inves­ti­ga­tions which can cover decep­tive import prac­tices, such as to the rep­re­sented qual­ity of prod­uct (some claim that is an issue with olive oil). Section 337 inves­ti­ga­tions can lead to a USITC order exclud­ing accused imports from the U.S. mar­ket as long as the claimed decep­tive prac­tice con­tin­ues. Section 337 inves­ti­ga­tions can only begin with the fil­ing of a com­plaint by U.S. pro­duc­ers.

The USITC said that by August 12, 2013 it would sub­mit its report on this §332 olive oil inves­ti­ga­tion to the House com­mit­tee request­ing it. In doing so, the USITC plans to hold a pub­lic hear­ing on December 5, 2012 (if requested by any party by November 14, 2012); and writ­ten sub­mis­sions are due by Feb. 12, 2013. Interested par­ties (domes­tic U.S. pro­duc­ers, U.S. importers and/or for­eign exporters/producers) often par­tic­i­pate in §332 inves­ti­ga­tions to pro­tect their inter­ests

This §332 olive oil inves­ti­ga­tion has the mak­ing to be quite inter­est­ing, as to issues raised and con­tested, and impli­ca­tions for future trade actions. Generally, U.S. pro­duc­ers do not under­take efforts to get the U.S. Congress to request a §332 inves­ti­ga­tion unless they have some end objec­tive in mind. Increasing olive oil imports into the United States (now at almost US$1 bil­lion, at an annual rate), and their declin­ing unit val­ues, over the last three years, and espe­cially thus far in 2012, can be an indi­ca­tion of poten­tial trade actions – as has been in other indus­tries.

Dr. Peter Koenig, Squire Sanders (US) LLP, Washington DC, tel 202 669 1901. Squire Sanders spe­cial­izes in U.S. trade law cases, includ­ing USITC §332, AD/CVD and §337 inves­ti­ga­tions, has a strong lob­by­ing prac­tice, as well as par­tic­i­pates in AD/CVD actions around the world. Squire Sanders is a global law firm with offices through­out the United States (includ­ing Washington DC and California), Europe, Australia, Argentina, Peru and North Africa, and co-coun­sel in South Africa and Mexico.
This is a reader-sub­mit­ted opin­ion. Do you have an opin­ion you’d like to share in an arti­cle? See our sub­mis­sion form and guide­lines here.
Olive Oil Times Video Series

Related Articles

Feedback / Suggestions