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EU-US battle over Spanish olive tariffs at standstill

EU-US battle over Spanish olive tariffs at standstill

The European Commission will continue to abide by the divisive US tariffs on Spanish black olives, while EU lawmakers and Spanish producers are seeking more EU support with legal fees and losses.

On Monday (9 January), MEPs in the European Parliament’s agriculture committee (AGRI) discussed with the EU executive and industry representatives the ongoing tariffs imposed by the US on ripe olives from Spain.

The US is the principal export destination for Spanish olives, accounting for up to 35% of the American export market share.

However, Washington imposed tariffs in 2018 on imports of the olives, claiming that a disproportionate amount of EU subsidies directed to Spanish olive producers – the Common Agricultural Policy (CAP) – were harming their US counterparts.

The legal battle following the US imposition of countervailing and anti-dumping duties on Spanish olives has been going on for over four years without significant changes in practice.

In November 2021, the World Trade Organisation (WTO) ruled that the US “had acted in several instances inconsistently with its obligations” and urged the country to comply with the resolution by 14 January 2022.

Following a decision of the US Court of International Trade and a final determination issued on 20 December 2022, EU stakeholders believe the US did not make the necessary changes to its legislation to address the WTO concerns.

“We are in a rather difficult situation,” said John Clarke, director of international affairs at the European Commission’s agriculture service (DG AGRI). However, the EU official reassured lawmakers that the EU executive “will consider all possible political and legal means to end the duties”.

Clarke described the US tariffs as ‘blatant protectionism’, adding that “it is unacceptable for any WTO member to be in breach of the obligations”.

Speaking before MEPs, Commission’s chief for trade enforcement Stephanie Leupold was more cautious. “In terms of legal means, we [the EU] cannot decide by ourselves that this is non-compliance,” she said.

In that case, the Commission ‘would need to seek a compliance panel’ at WTO, which would make the judgment on whether the US had correctly implemented the resolution or not. 

That “is a prerequisite for us then to take further means and possibly, if there is non-compliance, it can lead to retaliatory rights,” she explained to the Parliament.

Spanish producers taking a hard hit

For over four years, the tariffs have caused a drop of 70% in exports of black olives to the US, equivalent to ‘almost’ €70 million, according to Gabriel Cabello, president of the Spanish olive cooperative Agro Sevilla.

With non-EU countries taking up more space in the US olive market, Cabello called for “proactive diplomacy to execute the order issued by the WTO” and “international promotion […] to pave the way into new markets”.

In addition, he said producers would like to see “specific support to the table olive industry in order to help us cover the legal costs” that he estimates are over €15 million.

Spanish socialist MEP Clara Aguilera echoed the words and demands of Cabello, adding that the “very high costs of litigation” are being paid by the producers and farmers themselves “euro by euro”.

She also lamented that 12 months on and with the US’s deadline expiring this weekend, “we are still in the same situation”.

The Commission proposed options to support Spanish producers, including rural development support under the CAP’s so-called second pillar, as well as promotion instruments to diversify markets and state aid. However, Clarke said it is “not feasible for the Commission to give financial support directly for legal fees”.

Agrifood Brief: Caught in the crossfire

Just recovering from the punitive tariffs enforced on the sector by the US, still reeling from a spike in the price of fertilisers, the EU’s agri-food sector has once again found itself, through no fault of its own, caught in the crossfire of another geopolitical conflict.

Not only a Spanish issue

Spanish MEPs and other stakeholders emphasised that the issue goes beyond Spain, with broader implications for the CAP as a whole and other EU industries.

“We feel that this is a direct attack on the CAP, and that’s affecting table olives. But in the future, this could also affect other industries like meat, olive oil, and any other products that may be produced in Europe,” the president of Agro Sevilla warned in the hemicycle.

Juan Ignacio Zoido, centre-right MEP from the Spanish Popular Party, followed suit by asking the Commission to “be prepared” for future “attacks” against the CAP.

“The threat is not only for Spain but for all EU producers given that they undermining one of the main policies in the EU,” he continued.

President of the farmers’ association Cogeca Ramon Armengol said in a statement after the debate that “if these tariffs are allowed to continue, […]  the risk is that any other third country can tomorrow accuse any other European sector of dumping and potentially questioning the global legitimacy of the CAP. The EU must not allow this.”

[Edited by Gerardo Fortuna/Nathalie Weatherald]

Written by Kristel Haire