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Opinion
20/12/2017

Black Spanish olives, almost defenseless

Antonio de Mora. General Secretary of the Spanish Association of Table Olive Exporters (Asemesa)

In June, the two largest table olive companies in California submitted a petition to the government to initiate anti-dumping and countervailing duty investigations against Spanish black olive imports, accusing the industry of unfair competition and alleging that, due to aid the industry receives from the EU, it's selling its olives below market prices, which is hurting growers in California.

This is a new effort by producers in California to impede competition from Spain and protect its market, which they have tried to do on several occasions, whenever they had the chance in the 1970s and 80s and as a result of any commercial dispute between the US and the EU.

This time, it's the protectionist environment created by President Trump that most certainly encouraged the growers in California to submit the request, which led the US to open three investigations, which are being completed by two different agencies and which will conclude in June of 2018. The International Trade Commission is responsible for deciding whether or not imports of Spanish black olives jeopardizes the industry in California or if it's just a threat, and the Department of Commerce will look into whether Spanish companies were engaging in dumping, i.e. selling below cost or prices in Spain, and if EU subsidies are driving those prices.

A few days ago, the US made the first major decision as part of the investigations by imposing a provisional duty which will be 4.47% for most exporting companies, while the duty for three companies described as "collaborators," the duty will be 2.31%, 2.47% and 7.24%.  We're going to take a closer look at the criteria and calculations that were made to try to reduce the duties as much as possible; at first glance, there's a notable difference between them that doesn't make much sense.

These duties, to which others may be added, are provisional and will have to be confirmed or annulled at the end of the process, which is expected to be in June.  The real impact on the sector will become visible in the coming months, when we will be able to compare figures and see the loss of competitiveness compared with companies from California and rival countries, such as Egypt, Turkey, Morocco and Portugal, which are not impacted by this measure since it only affects Spain.

The most serious issue is not the negative effect for our sector, which is clearly concerned about possibly losing this important market with great scope for growth but, rather, the US's threat vis-à-vis Europe's agriculture and agri-food sector, as it's calling into question the EU's subsidy model.

Until now, we thought that all aid included in the "Green Box," as the World Trade Organization calls it, was permitted; however, from now on, if the EU doesn't impede it, they're debatable, and even illegal.  The aid received by table olive producers is not specific, i.e. farmers receive them simply because they're farmers; they're not subsidies for exports, they don't incentivize production and they don't affect the prices at which companies sell their products.  Nevertheless, the US is questioning them, and if it ends up imposing countervailing duties on subsidies and the EU allows it, any sector from any country in the world that competes with EU products may go down the same path and open up similar investigations.

To that end, associate companies of Asemesa, the  Spanish Association of Table Olive Exporters, is defending not only the rest of the sector, but all agri-food sectors in Europe which could suffer the same attack. As a result, this is a priority matter for the EU and for Spain, and the sector should receive the maximum support from the Administration in every way.

In the last few days, great strides have been made with all Administrations, but more is needed because the aggressiveness and disproportionality with which the Department of Commerce is carrying out the investigation is leaving Spain defenseless.

Editor's note:

This publication offered the US Embassy in Spain the chance to include the US government's point of view on this issue. That invitation was declined, with the Embassy noting that "This issue is developing and it does not make sense to comment on it at this time, beyond the official communiqués from the US Department of Commerce."

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