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Pascrell, Arrington Urge Olive Oil Protection

Bipartisan letter to trade representative lays out importance of European imports

Washington, August 21, 2019

U.S. Reps. Bill Pascrell, Jr. (D-NJ-09) and Jodey Arrington (R-TX-19) led 17 members of the House of Representatives writing to U.S. Trade Representative Robert Lighthizer as the Trump Administration proposes new import duties on goods from the European Union (EU).

“We write with concern regarding the inclusion of olive oil on the list of products being considered for additional import duties in response to the World Trade Organization Large Civil Aircraft Dispute,” the members write. “[W]e are concerned that tariffs on European olive oil would cause significant domestic harm because there is no sufficient alternative supply of olive oil. We ask that you remove olive oil from any future product lists related to this case.”

Several billion dollars of European products, including olive oil, could face 100% import duties to penalize the EU in relation to the Large Civil Aircraft Dispute (DS316) case before the World Trade Organization (WTO). The U.S. and the EU have long claimed that the other either directly or indirectly subsidize their domestic civil aircraft industries, respectively Boeing and Airbus. Following intense negotiations, in 1992 both sides concluded a deal placing limits on government subsidies affecting the aircraft industry. Citing dissatisfaction with EU compliance, in 2004 the U.S. filed to the WTO dispute settlement system and withdrew from the agreement. In 2018, the WTO Appellate Body issued a final decision in favor of the U.S., which upheld a 2016 ruling that the EU had not eliminated illegal state aid to Airbus.

“[W]e ask that you move forward with this settlement without threating the olive oil industry by removing olive oil from any future product lists related to this case. Thank you for consideration of our views. We look forward to working with you to secure U.S. rights under the WTO in ways that minimize domestic harm and promote public health,” the letter concludes.

The U.S. is the largest importer of olive oil, about 70 percent of which comes from the EU. Even if all non-EU olive oil available for export were exported here, there would still be a shortage of about 100,000 tons, or 30 percent of current consumer demand. The lack of an alternative supply means that such import duties would lead to significant increases in the price of olive oil for consumers, food retailers, food manufacturers, restaurants, and others in the supply chain.

In addition to Reps. Pascrell and Arrington, the letter is also signed by Reps. Mark Amodei (R-NV-02), Josh Gottheimer (D-NJ-05), Thomas Suozzi (D-NY-03), Will Hurd (R-TX-23), Elise Stefanik (R-NY-21), Anthony Brindisi (D-NY-22), Mark Takano (D-CA-41), Dwight Evans (D-PA-03), Jim Himes (D-CT-04), Salud Carbajal (D-CA-24), Stephanie Murphy (D-FL-07), Kathy Castor (D-FL-14), Frank Pallone, Jr. (D-NJ-06), Dutch Ruppersberger (D-MD-02), Mac Thornberry (R-TX-13), Gerry Connolly (D-VA-11), and Jan Schakowsky (D-IL-09).

A copy of the members’ letter is available here, the text of which is provided below.

August 21, 2019

The Honorable Robert E. Lighthizer
U.S. Trade Representative
600 17th Street, NW
Washington, D.C. 20508

Dear Ambassador Lighthizer:

We write with concern regarding the inclusion of olive oil on the list of products being considered for additional import duties in response to the World Trade Organization (WTO) Large Civil Aircraft Dispute (DS316). We firmly support your determination to secure U.S. rights under the WTO Agreement in this important case; however, we are concerned that tariffs on European olive oil would cause significant domestic harm because there is no sufficient alternative supply of olive oil. We ask that you remove olive oil from any future product lists related to this case.

Without European imports of olive oil, the United States cannot meet current consumer demand. The United States is the largest importer of olive oil, of which about 70 percent comes from the European Union (EU). If all non-EU olive oil available for export would be exported to the United States, there would be a shortage of about 100,000 tons, or 30 percent of current consumer demand. The lack of alternative supply to European olive oil means that such tariffs would lead to extraordinary increases in the price of olive oil for consumers, food retailers, food manufacturers, restaurants, and many others.

We have supported the previous decades of growth in olive oil consumption because it has improved the diet of millions of Americans. As you may know, the Food and Drug Administration (FDA) has approved two Qualified Health Claims for the heart healthy qualities of monounsaturated fat and oleic acid in olive oil.[1][2] The growing awareness of the health qualities of olive oil have contributed to the growing demand for olive oil. Food manufacturers use it as an ingredient to differentiate their products, to reduce harmful fat content, and to increase sales. Large price increases can push many consumers and food manufacturers to choose food oils that lack the health qualities of olive oil, as well as increase the incentive for unscrupulous actors to sell misbranded olive oil.

Without tariffs, olive oil consumption has significant room for growth—only about 40 percent of U.S. households use olive oil, and per capita consumption remains a small fraction of that in Greece, Italy, and Spain, according to consumer spending data compiled by Nielsen. Federal policies should bit deter this potential for growth.

We firmly support your work to compel the EU to implement the WTO Dispute Settlement Body recommendations in this case. However, we ask that you move forward with this settlement without threating the olive oil industry by removing olive oil from any future product lists related to this case.

Thank you for consideration of our views. We look forward to working with you to secure U.S. rights under the WTO in ways that minimize domestic harm and promote public health.

Sincerely,

 

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