` Trade Commission Report Fails to Consider Latest E.U. Measures - Olive Oil Times

Trade Commission Report Fails to Consider Latest E.U. Measures

Sep. 30, 2013
Virginia Brown Keyder

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The USITC report on Competition between U.S. and Major Foreign Supplier Industries,’ notably the EU, pro­vides a wealth of infor­ma­tion, although for seri­ous researchers it would have been more help­ful if the vast major­ity of this infor­ma­tion had not been sourced from tele­phone calls and emails with unnamed inter­locu­tors. Similarly, it takes lit­tle note of either major leg­isla­tive changes in the EU that will take full effect by the end of 2014, or the rise of what may well prove to be a major sup­plier to the world mar­ket, namely India, who, with the help of Israeli invest­ment and tech­nol­ogy and low labor costs is slated to put its oil on the mar­ket for the first time in the com­ing sea­son.

As is often the case with gov­ern­ment reports, one hand is pay­ing no atten­tion to what the other hand is doing. This Report needs to be read with the back­drop of the ongo­ing nego­ti­a­tions between the US and the EU, set to resume for a sec­ond ses­sion next week, towards a Transatlantic Trade and Investment Partnership.

Cries for gov­ern­ment help after a wrong-footed and highly spec­u­la­tive invest­ment

Central to US goals in these nego­ti­a­tions are: wide­spread dereg­u­la­tion; insti­tu­tion­al­iza­tion of cor­po­rate law­suits against states that take leg­isla­tive actions that have the pos­si­bil­ity of reduc­ing prof­its of for­eign investors, and min­i­miza­tion of the effects of the EU sys­tem of pro­tect­ing reg­is­tered des­ig­na­tions of ori­gin (PDO’s).

Labyrinthine leg­isla­tive pro­pos­als like those sug­gested in the Report (which some see as cries for gov­ern­ment help after a wrong-footed and highly spec­u­la­tive invest­ment) will only expose a hypocrisy that can­not but weaken the US posi­tion in those nego­ti­a­tions. In fact, a report on growth and jobs issued jointly by the EU and the US ear­lier this year talks specif­i­cally about reduc­ing redun­dant and bur­den­some test­ing and cer­ti­fi­ca­tion require­ments.”

What the USITC Report does elu­ci­date is the fun­da­men­tal dif­fer­ence between California pro­duc­ers, who report­edly have bor­rowed large sums of money in order to ren­der what is essen­tially gen­tle­men farm­ing prof­itable by emit­ting plain­tive cries for the iconic level play­ing field,” and tra­di­tional European pro­duc­ers — by and large small landown­ers to whom bank loans are often unavail­able, and who have often been pro­duc­ing for gen­er­a­tions. Like many agri­cul­tural sec­tors across Europe, these farm­ers rely on EU funds to main­tain their liveli­hood, sup­port rural devel­op­ment, ensure food secu­rity and pro­tect the land against ero­sion. These are not goals that the EU will, or can, aban­don.

Notable for its absence in the Report are the exten­sive leg­isla­tive mea­sures that the EU has taken over the past three years to ensure the qual­ity, purity and trace­abil­ity of its olive oils. These mea­sures will be enforced at the national level and their prime ben­e­fi­cia­ries will be pro­duc­ers of high qual­ity oil. Consumers will be made aware through promi­nent label­ing that Bottled in Italy” is no indi­ca­tion of Italian con­tents as all geo­graph­i­cal sources must now be indi­cated. These mea­sures have already enabled extra vir­gin pro­duc­ers in Greece and Spain — for the first time — and Italy (whose high-end pro­duc­ers suf­fered from the effects of low prices for blended oil) to mar­ket their oils directly to local and emerg­ing mar­kets instead of feed­ing sur­rep­ti­tiously into the mass-mar­ket Italian (and American) bot­tling indus­try.

Further, rely­ing on the Australian model” and its pleas for fur­ther test­ing and reg­u­la­tion, will not serve Californian pro­duc­ers well. For while the report indi­cates that imports have fallen with the rise of Australian buy local cam­paigns it fails to note that, accord­ing to 2013 USDA fig­ures, the over­all con­sump­tion growth rate in that coun­try has been falling steadily since 2009 (when it jumped from zero in 2008 to 10 per­cent, after hav­ing a neg­a­tive growth rate of 7 per­cent in 2007). Similarly, it has been reported that Australians are grow­ing tired of expen­sive local bou­tique” oils and are return­ing to super­mar­ket brands. The buy local” move­ment is not with­out con­tro­versy and food fads are real.

The report relies on the bro­mide that runs through much of what con­sti­tutes national dis­course these days: the enemy is for­eign. It strongly sug­gests that California could win over what is admit­tedly an East Coast con­sumer base if only for­eign com­pe­ti­tion oper­ated under free mar­ket” prin­ci­ples. Like for­mer US Secretary of Labor Robert Reich summed up in his blog recently: If some peo­ple [i.e. European grow­ers] aren’t paid enough to live on, the mar­ket has deter­mined they aren’t worth enough.”) In fact, a much more real­is­tic tar­get for the domes­tic healthy up-mar­ket olive oil indus­try would be chem­i­cal-laden (domes­ti­cally pro­duced) pre­pared salad dress­ing. Instead of striv­ing to edu­cate the con­sumer on oil chem­istry and human phys­i­ol­ogy (n.b., it isn’t going to hap­pen), the sim­ple slo­gan of Read the labels and then decide” might work mir­a­cles.

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