Trade Deal Would Remove Tariff Imbalance for U.S. Olive Oil Producers

The Transatlantic Trade and Investment Partnership (TTIP) con­cluded its most recent round of nego­ti­a­tions on April 29, 2016 in New York. A fit­ting place to have this meet­ing, as New York is a transat­lantic trade hub with goods amount­ing to about $400 mil­lion arriv­ing here daily from Europe. On the other hand, EU imports from the United States amount to more than $730 mil­lion every day.

The Transatlantic Trade and Investment Partnership was ini­ti­ated in 2013 to facil­i­tate the large exchange of goods such as food, cloth­ing, phar­ma­ceu­ti­cals, chem­i­cals, and even cars on both sides of the Atlantic.

The pur­pose of the TTIP is to address global issues, increase jobs, and encour­age eco­nomic growth and inter­na­tional com­pet­i­tive­ness through increased trade and invest­ment between the United States and the European Union.
See Also:Trade Commission Releases Report on U.S. Olive Oil Competitiveness
Since the launch of the part­ner­ship, the TTIP has had numer­ous nego­ti­a­tions in an attempt to meet its goals, which, accord­ing to press state­ment at the close of the TTIP talks in Brussels in February 2016, is one of the most ambi­tious trade agree­ment in his­tory. The aim ​“is to bridge, where pos­si­ble, reg­u­la­tory diver­gences and pro­mote greater reg­u­la­tory com­pat­i­bil­ity — all with­out low­er­ing the envi­ron­men­tal, health and safety pro­tec­tions that our cit­i­zens have come to expect.”

In his address dur­ing the lat­est nego­ti­a­tions, chief US nego­tia­tor Daniel Mullaney said, ​“TTIP will not only elim­i­nate tar­iffs, sim­plify pro­ce­dures, cut red tape and bridge dif­fer­ences in our reg­u­la­tory sys­tems to the eco­nomic ben­e­fit of con­sumers, work­ers and busi­nesses alike: it will also have a valu­able strate­gic ben­e­fit as well.”

The TTIP nego­ti­a­tions cen­tered on three major areas: mar­ket access, reg­u­la­tory coop­er­a­tion and estab­lish­ing rules.

Under mar­ket access, the focus of the TTIP is on low­er­ing or elim­i­nat­ing cus­toms tar­iffs on both sides of the Atlantic. Reducing tar­iffs would greatly ben­e­fit US farm­ers, con­sid­er­ing that the United States is the world’s largest exporter of agri­cul­tural goods. In 2013, US exported food and agri­cul­tural prod­ucts worth more than $145 bil­lion, of which $10 bil­lion were to the EU.

As American olive oil pro­duc­ers con­tinue efforts to expand the mar­ket for their prod­ucts, the Transatlantic Trade and Investment Partnership would pro­vide sig­nif­i­cant relief to exporters. At present, they pay $1,680 in duties per ton of olive oil shipped to EU, while EU pro­duc­ers only pay $34 per ton to the United States.

The break­down of tar­iffs for olive oil imported to the United States from the EU is $0.05/kg on con­tent and con­tainer weigh­ing less than 18 kilo­grams, a rate that decreases to $0.034/kg on weights over 18 kilo­grams. In con­trast, the EU tar­iff rates for less than 18 kilo­grams of olive oil imported from the United States is $1.57/kg net weight, which increases to $1.59/kg for higher vol­umes.

“Fair mar­ket access for com­pet­ing prod­ucts from many coun­tries and pro­duc­ers is always the best way to empower con­sumers to choose what works best for them. This cer­tainly applies to extra vir­gin olive oil,” said Kimberly Houlding, ‎the pres­i­dent and CEO of the American Olive Oil Producers Association. ​“With fair access, extra vir­gin olive oils from all over the world can be appro­pri­ately com­pared on vari­etal, qual­ity, fresh­ness, fla­vor and price. A reduc­tion or elim­i­na­tion of tar­iffs under the Transatlantic Trade and Investment Partnership would, for the first time, allow U.S. pro­duc­ers an oppor­tu­nity to offer European con­sumers addi­tional choices in high-qual­ity extra vir­gin olive oil.”

In other areas, the TTIP aims to estab­lish reg­u­la­tory coop­er­a­tion that will mean uni­ver­sal rules and reg­u­la­tions that will cover all aspects of a prod­uct rang­ing from labels to prod­uct tests and safety. Finally, the TTIP also intends to estab­lish rules to pro­tect intel­lec­tual prop­erty, use of pro­pri­ety names and set­tle rules at the com­pany and national lev­els.

Referring to the present meet­ing as ​“a round of very intense period of nego­ti­a­tions,” the EU Chief Negotiator, Ignacio Garcia Bercero, said that con­sumers and com­pa­nies would feel an imme­di­ate impact on prices of some prod­ucts.

A 2013 study con­ducted by the Center for Economic Policy Research in London esti­mates that the TTIP could boost the EU econ­omy by 120 bil­lion Euros and the US econ­omy by 95 bil­lion Euros by 2027.

However, it may be a while before the con­sumers and pro­duc­ers see changes in prices of imported goods. According to Blomberg BNA in Jan 2016, the EU Ambassador to the US, David O’Sullivan said, ​“TTIP could be con­cluded some­time in 2016 but prob­a­bly would not take effect until 2018.”

• Office of the United States Trade Representative


• The Business Times


• American Olive Oil Producers Association Statement for the USITC Investigation