Trump, the Amazon, the Cadena law … the olive suffers a perfect storm

The latest data available indicates that in this campaign for the collection of table olives in Spain, the world’s leading producer, the harvest will be 529,000 tons. An average campaign, but higher than last year, which was 465,000 tons. “Given the lower volume of sales that has occurred this year and that which will possibly occur next year and taking into account that with last year’s stock and this year’s harvest the table olive industry has 800,000 tons, there will be no tensions in this aspect in the market “, he assures José Manuel Escrig, attached to the management and spokesperson for Asemesa (Association of Exporters and Industrialists of Table Olives).

Tensions come from the other side. And it is that this is the first harvesting campaign (September and October) in which the Spanish table olives suffer jointly the duties imposed by the Trump administration towards black olives (which have been taxed at 35% since mid-2018 for anti-dumping and anti-subsidy) and green (taxed at 25% in the Airbus case since October 2019).

Tariffs that have led to a dramatic situation for Spanish olives, since the United States supposes more than 20% of Spain’s olive exports. There is also no outlet in the internal price market, in principle, because there are some situations such as those caused by the Chain Law approved by the executive Sánchez after the agricultural protests at the beginning of the year. Thus, the olive industry, which these days must carry out the purchase of raw material from farmers for the entire year, faces the dilemma of knowing “whether the tariff on green or black olives will be maintained, now that Brexit will enter the fray and that it may imply tariffs of 12.5% ​​for the Spanish product that goes to the United Kingdom; or what will happen to the trade agreement that is about to be ratified between the EU and Mercosur (Argentina. Brazil, Paraguay and Uruguay), which can also seriously harm Spanish olives “.

According to this agreement, the industry says, “the tariffs for the Mercosur olives are eliminated, the one that comes from Argentina, and the EU that goes to Mercosur remains with the current tariffs. What is the problem? That Mercosur has also signed an agreement with Egypt, one of the main producers of table olives in the world, and in Mercosur there is Brazil, which is the main consumer-non-producer country in the world and in a period of 5 to 7 years the export from Egypt to Brazil there will be no tariff and from Spain to Brazil it will. ”

“There our last hope is that Germany doubts whether or not to ratify the agreement with Mercosur by a problem about the deforestation of the Amazon. Let’s hope that in the end it will not be ratified because it would affect Spanish table olives a lot “, they add from the employer’s association.

The trade war with the US

The World Trade Organization (WTO) authorized the European Union (EU) on Tuesday to impose trade sanctions on the United States for an annual maximum of 3.993 million dollars (2.89 billion euros) for the latter’s undue subsidies in favor of his Boeing aircraft builder. This is the main conclusion of a ruling issued by an arbitration panel of the Organization, one more piece in the long Boeing-Airbus dispute that faces both commercial powers. And it is that a year ago, the same organization authorized United States to impose tariffs totaling $ 7.5 billion (about 6,400 million euros) to products imported from Europe, including Spanish oil, olives or wine, in retaliation for the aid that the European Union had given Airbus. In that case, the WTO determined in May 2018 that the EU was not taking the necessary measures to eliminate subsidies and public aid to Airbus, which opened the door for the United States to impose tariffs on European products for “damaging US interests.”

Table olives generate in our country more than 8,000 direct jobs, more than 6 million wages in the harvesting campaign and contributes “slightly more than 1,000 million euros per year to the Spanish GDP”. In the United States, only black olives are produced, there are two large producers in California, and in August 2018, to protect North American producers, with the “‘America first’, the Trump administration imposed a 35% tariff on Spanish olives “. They explain in Asemesa that US producers, “at that time, were losing the market in their country at the hands of Spanish olives and they only had a little share left in retail.”

Efe

From there, the Trump administration “was based on the fact that the aid of the European CAP distorted the market and the prices at which Spanish black olives were sold in the United States and as an anti-dumping policy imposed tariffs on Spanish black olives of a 35% for 10 years “.

The Spanish olive industry has 6 million euros already spent on lawyers to try to reduce that tariff, “and every year we leave two or three million more”, but the true fact is that “we had a 75% market share of black olives in the United States and now we have 35%. We have lost 40 points of market share and 70% of exports to the USA. We have lost that market to Morocco and Egypt and we have lost a client and when a client is lost, it is lost for years and it is very difficult to recover it. “

With regard to green olives, “without having anything to do with it, because this is the cause of the United States-EU conflict over the Airbus-Boeing case”, Spanish olives have suffered a 25% tariff since October 2019 on their exports to North America. For this reason, the Spanish table olive industry has repeatedly called for “to stop giving ‘illegal’ aid to Airbus. We are not against Airbus, but we do ask that in order to negotiate with the United States we must stop give illegal aid. In addition, we ask the Spanish administration that negotiates directly with the United StatesJust as France has done with certain products on which it has managed to get the United States to remove the tariff, but the Spanish Government tells us that it does everything it can. That is, so far: nothing at all, “complains Escrig from his position at the helm of the Spanish olive industry.

Once the two WTO rulings are known, which open a trade war between the EU and the United States, Brussels is not in favor of a trade war and hopes that with the simple threat the waters will return to their course, “but we are in full electoral campaign in the USA and the EU does not want to interfere in it, so it will not negotiate until after the elections, “says the Spanish olive industry,” so, with the elections in November, if the administration is maintained Trump will not be able to start negotiating until December, and this as long as they want to do so, and if there is a change in administration, the new government will not be constituted until the end of January and negotiations will not begin until February, which is lethal for the Spanish olive “.

“We will see what happens. If they hit us, then we will fight back much harder than they do,” said the current White House tenant on Thursday before leaving for a campaign event in North Carolina. Since the start of the tariff on green table olives, a year ago, the sector has lost “30% of exports to the United States” and as a whole, since 2018, “the tariff on green and black olives they have meant a loss of sales of 50 million kilos and a turnover of 100 million euros. Since the tariffs came into force, the Spanish table olive sector has stopped billing in the United States 100 million euros “.

Demolition Man. “It is the perfect storm for the Spanish table olive industry, which is experiencing its worst moment in 120 years of history: Trump’s tariffs, Brexit, the agreement with Mercosur, the Chain Law in Spain … AND now we add the pandemic and the collapse of the Horeca channel, which accounted for 30% of our sales in Spain “.

.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.