World Trade Organization | Black olive: Europe reopens the dispute with the US over tariffs, which cost Spanish producers 280 million

2023-08-15 10:31:30

When five years have passed since the United States tariff punishment on Spanish black olives, producers look again with hope towards Geneva (Switzerland), headquarters of the World Trade Organization, after the reopening of the case to re-study whether the taxes imposed by Washington conform to international standards. It was on August 1, 2018 when Washington raised export taxes on this Spanish product from 21.60% to 34.75% with the aim of protecting the Californian olive industry “against agricultural aid from the European Union “. The authorities in Brussels have fought at the WTO to remove tariffs they consider “illegitimate” and achieved a partial victory in 2021 when the United States reduced the tax from 35% to 31%. The decision taken by the US administration to tax black olives already means losses of 280 million for Spanish producers.

Now the case is reopened because the EU continues to defend that these taxes are not compatible with international regulations, since the aid is received by farmers through the CAP and not by producers. own OMC announced on July 28 that a new panel had been created to determine whether the United States had complied with a previous ruling against tariffs on Spanish black olives. In this way, the dispute between Brussels and Washington, which began in 2019 and which would seem to have been closed in 2021, reopens. “The tariffs are unfair and that is something that was already recognized in a previous resolution,” explains Antonio Mora, Secretary General of the Spanish Association of Mesa Olive Exporters and Industrialists (Asemesa), and points out that Spanish producers have lost 75% of the market they had in the United States as a result of the protest by the California olive sector, which asked the authorities of the US to investigate Spanish exports for the aid that farmers receive through the Common Agrarian Policy (CAP).

“The EU considers that the United States imposes tariffs on black olives from Spain based on in a legal error because the CAP aid does not benefit producers, but are delivered to those farmers who grow the olive trees. The US Department of Commerce ruling that imposed the tariffs was based on this and that was already considered inconsistent with WTO rules. If it is taken into account that the subsidies are received by olive growers, it is likely that the United States will not be able to continue imposing taxes of 35%,” say sources from the European Commission.

“On behalf of the Government of Spain and the European Union, we will exhaust all possible avenues to defend the interests of the Spanish black olive sector, in order to finalize this process and the economic consequences it has on it. The request, by part of the Commission, of this compliance review panel before the World Trade Organization (WTO), on July 14, joins the rest of the actions launched to achieve the conclusion of the liens. the European Commission and the Junta de Andalucía”, say sources from the Ministry of Agriculture.

“Legal ruses”

“They have used all the legal tricks at their disposal and have evicted us from the market in the United States. Egypt, Turkey or Morocco have benefited,” says Antonio Mora, from Asemesa, who points out that until 2024 there will be no further progress on this case. . The European Union has given priority to this commercial conflict because it affects its entire policy of agricultural subsidies through the CAP. The community bloc fears that an unfavorable decision by the WTO in this regard could be a threat to all the aid that remains in Europe for agricultural activity.

Last February, both the EU and the US reached an agreement to establish a special group to study whether the tariffs comply with international regulations. “Both parties have agreed that they will cooperate to allow a panel to make a report within 90 days of its formation”says a WTO spokesman. The special group is already formed and will be made up of President Daniel Moulis, and members Martín García and Charis Tan. Eight countries (Brazil, China, India, Japan, Russia, Switzerland and Turkey) have joined the new group as third parties quarrel. In this way, these countries reserve the right to participate in the process before the WTO and will be able to give their testimony before the panel in the coming weeks.

Sources from the European Commission point out that the working groups that are set up for this type of work usually take an average of 13 months to reveal their verdict, although they hope that in this case they will be more agile, since It is a “simple legal issue”.