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Grape tariffs cut; industry wins in court

California's fresh grape farmers received two pieces of good news in recent days with the announcement of a trade agreement to reduce tariffs in Central America following an earlier court victory for the industry.

It was announced recently that the current 15 percent tariffs on fresh California grapes exported to El Salvador, Guatemala, Honduras and Nicaragua would be eliminated immediately upon ratification by congress of the Central America Free Trade Agreement.

“We've been working closely with the U.S. Trade Representative and the Department of Agriculture on this issue,” said Kathleen Nave, president of the California Table Grape Commission. “We are pleased to have the grape tariff elimination included in the agreement and urge Congress to ratify the agreement.”

Exports to the four Central American countries totaled more than eight million dollars last year and are on track to increase for 2003. Nave said the tariff elimination would lead to increased exports and increased dollars coming to California. “California provides the ideal conditions for growing fresh produce and produce exports have become an important part of the state's economy,” said Nave. Total fresh grape exports were nearly $400 million last year.

Lawsuit decision

The tariff reduction news followed the announcement a few days earlier that a federal district court had ruled in favor of the grower-created table grape commission in a lawsuit challenging the constitutionality of the organization's advertising program. The commission was created by the state's fresh grape growers in 1968 to aid in research and promotion for the industry. In 1996, two growers sued the commission, claiming that the commission's advertising violated their freedom of speech. A federal district court had earlier ruled in favor of the commission, dismissing the complaint prior to trial. That dismissal was then overturned by the Ninth Circuit Court of Appeals.

In the latest court action, the two dissenting growers alleged that the Ninth Circuit had done more than simply reverse the dismissal.

“The plaintiffs claimed in court and in the press that the Ninth Circuit decision last January had effectively ended the case in their favor,” explained Nave. “But this week the district court clearly said that the plaintiffs were wrong. As this decision makes clear, all the Ninth Circuit did was to return the case to the trial court for litigation. Nothing about the commission or its work has been found unconstitutional, and none of the commission's many defenses have been eliminated.”

Nave said the vast majority of the state's fresh grape farmers wanted the commission to continue promoting, opening markets and reducing trade barriers.

“The commission was created by the industry and is supported by the industry. This tariff elimination is just the latest example of how the industry works together for the benefit of every fresh grape grower in the state.”

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