California's ripe olive industry won another battle against unfair trade practices by the Spanish olive industry and European Union (EU). A recent decision by the World Trade Organization (WTO) upheld U.S. antidumping and countervailing duties to defend domestic producers from unfair pricing practices.
The U.S. table olive industry won its trade dispute against unfair foreign practices in 2018 when the federal government enforced remedies against practices by Spain and the EU to sell highly subsidized table olives at costs well-below U.S. cost of production. In citing the unfair trade practices of Spain and the EU, the U.S. said then that Spain could not dump subsidized olives on the U.S. marketplace without consequences.
Those consequences included tariffs averaging 35% on the Spanish olives. Spain and the EU fought this vigorously because they viewed the issue as one extending to other commodities and trade.
The WTO ruling leaves the U.S. olive antidumping order entirely intact, provides a path for the U.S. Government to elaborate its subsidy analyses and maintain countervailing duties, and extensively reaffirms the International Trade Commission’s determination that unfairly traded Spanish olives have significantly harmed the U.S. industry.
According to one industry official with knowledge on the matter, the EU fought the issue of selling ripe olives at well-below fair market value to protect not just the olive subsidies, but other crops that benefit from complex subsidy payments that are not transparent.
Industry rebuilding itself
Since the 2018 U.S. decision to protect its table olive industry, the U.S. industry has worked tirelessly to rebuild itself with capital aimed at mechanizing the industry and improving efficiencies in the drought-tolerant crop. Significant capital continues to be spent to improve efficiencies, including an ongoing “One Million Tree Initiative” by Musco Family Olives, a California-based processor, to help transition the industry to modern, drought-friendly acreage, according to industry spokesperson John Segale.
“Make no mistake, the enormous olive subsidies being provided by the European Union (EU) and Spain, and the deliberate efforts to dump ripe olives from Spain into the U.S. market, have allowed the Spanish industry to take almost all our U.S. foodservice business and put our retail business at risk," said Michael Silveira, chairman of the Olive Growers Council of California in a prepared statement.
Todd Sanders, executive director, Olive Growers Council of California, says the WTO agreement bodes well for U.S. olive growers, but the decision to enforce this action still rests with the U.S. Trade Representative's office.
"We're hoping the U.S. Trade Representative's office continues with its enforcement action," he said.
“Although the EU may not like the close attention being given in the olive cases to the inner workings and unfair advantages of its agricultural subsidy programs, the EU has been allowed for too long to hide its grower subsidies behind deliberately nontransparent regulatory schemes, while the large benefits granted under those schemes have paved the way for Spanish companies to seize our market,” said Giulio Zavolta, a board member of the Olive Growers Council of California.