Image of olives on the tree via Flickr user Alpha.
Written by Edward Smith
Despite a ruling from the World Trade Organization calling U.S. tariffs on
Spanish olives undue, politicians and farmer advocates are calling for
continued action against what they call “unfair trade practices.”
The U.S. had placed tariffs on table olives coming from the Iberian peninsula after claiming that subsidies to farmers were illegal and were allowing them to dump their product in the marketplace, bringing prices lower than what California growers could sustain.
The ruling that came down from the WTO ended up being a mixed ruling.
“They found that yes, Spanish olives were being on U.S. market, but not that
Spanish olives benefitted from subsidies,” wrote Roland Fumasi, executive
vice president with RaboResearch Food & Agribusiness in an email. “The first part is in the U.S’s favor, but the second part is not.”
In order to comply, the U.S. would need to reduce tariffs that were put in
place in 2018.
Green olives were facing a 25% tariff and black olives were facing a
combined 25% tariff, according to the Olive Oil Times.
The panel from the WTO agreed with the E.U. that subsidies farmers were
receiving were not specific to olive growers, making the U.S. determination
wrong, according to a Geneva trade official speaking on background.
A subsidy must be specific in order to be covered by WTO subsidy
This is important because if the panel had determined the subsidy was
specific, that could have put other E.U. subsidies at risk of tariffs by the U.S.
The panel did not entirely rule in favor of the E.U., however. The dumping of
Spanish did negatively impact growers in the U.S., the panel concluded. This
leaves alive at least some portion of the tariff.
Emails and calls left with the Department of the Treasury were not returned.
The production of table olives in California has been in decline over the past
Tulare County is the only county that reports olive production as a line item in its crop report. In 2020, they reported 8,230 acres that produced 26,300 tons of the fruit valued at $35.2 million. And what olive production the Central Valley has has gone the way of olive oil rather than table olives.
Olives grossed $3 million in 2020 in Fresno County, $8 million in 2019 and $4 million in 2018, according to the Fresno County Ag Commissioner’s crop
respective crop reports.
Tariffs have resulted in declining imports of Spanish table olives, with
numbers falling 30% in the first half of 2020, according to Olive Oil Times.
And those with the Olive Growers Council of California claim tariffs have
allowed the “hundreds of family olive farmers the time they need to reinvest in modern farming techniques,” according to a press release.
“The antidumping and countervailing duties imposed by the U.S. Government have given our family olive farmers and thousands of allied workers hope for the future and time to revive the industry,” said Mike Silveira, a grower and chairman of the Olive Grower Council of California. “Ongoing enforcement — together with our own industry-led modernization efforts — provides an important government-industry model for how to rebuild sectors like ours that have been decimated by unfair trade practices.”
Politicians seem to have no appetite to reduce tariffs either.
“It’s important to the U.S. agricultural industry that we take steps to protect
California Olive Growers against unfair trade practices as seen with Spanish
olive imports. The U.S. must demand strong enforcement in all trade cases to protect American industries,” said Congressman Jim Costa in a statement (D-Fresno).
The U.S. would have to comply within a reasonable amount of time,
according to a Geneva trade official. If not, they could be subject to
countermeasures from the E.U.
Olive tariffs came in the suite of protective trade measures handed down by
the Trump administration.
The ruling did leave open the chance for an appeal but since August 2017,
the U.S. has been blocking the appointment of appellate judges because of
disagreements over rulings from the court. As of November, there are no
longer any judges in the Appellate Body.
“Although the EU may not like the close attention being given in the olive
cases to the inner workings and unfair advantages of its agricultural subsidy
programs, the EU has been allowed for too long to hide its grower subsidies
behind deliberately nontransparent regulatory schemes, while the large
benefits granted under those schemes have paved the way for Spanish
companies to seize our market,” said Giulio Zavolta, a board member of the
Olive Growers Council of California.