Agri-food sector pushes for US tariffs to be removed

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Government of Spain and the EU expect taxes to be withdrawn in the negotiation after the WTO authorization to tax United States products

The agri-food sector is satisfied with the recent decision of the World Trade Organization (WTO), which authorizes the European Union to impose a tariff coup on the United States amounting to 4,000 million dollars (about 3,400 million euros) for the illegal aid granted to Boeing. The main agricultural organizations are pressing for this negotiating trick to unravel the situation and eliminate the tariffs of the Donald Trump Administration that penalize Spanish products such as table olives, oil or wines.

These added taxes have dealt a severe blow to producers since late last year. To which has also been added, as if that were not enough, the impact of the pandemic. Between November and May, about 200 million euros of the sanctioned goods were stopped being exported if compared to the volume of the previous year, according to the data kept by the Ministry of Agriculture. Figure similar to that offered by the Platform for those affected by the Tariffs, with information provided by FIAB (Spanish Federation of Food and Beverage Industries). And the bill continues to grow for each month that they are maintained: at the current rate, about 400 million will be lost in a year. In other words, it will destroy almost half of what was exported of these products in 2018.

For this reason, the agrarian organizations of Spain put pressure and agree in their position after Tuesday’s decision of the WTO: the plan must be to eliminate tariffs or, if it is not achieved, it will be necessary to fight back. “I think it can help to sign peace and end the unjust trade war for the agri-food sector. Let’s hope that all tariffs will be withdrawn ”, assures Miguel Blanco, COAG general secretary. Lorenzo Ramos, secretary general of the Union of Small Farmers and Ranchers (UPA), joins this assessment, to which he adds: “If it is not achieved, there will be no alternative but to impose tariffs on products from the United States.”

All these words are repeated from each of the agrarian organizations, as well as from the Government of Spain. In addition, all the sources consulted agree that there is an uncontrollable factor at the moment that can change the process or, at least, delay the negotiation. “We want the tariff war to end as soon as possible, although the US elections in November will not help,” acknowledges Pedro Barato, president of Asaja.

The Government of Spain, for its part, positively valued the WTO decision. Both the Ministry of Agriculture and the Ministry of Commerce hope that the blood does not reach the river and they collect the glove from the organizations in the field. In other words, they are committed to reaching some kind of agreement between the European Commission and the United States that would bury the tariffs. “This gives us an advantage in the negotiation to eliminate the taxes approved almost a year ago by the United States,” acknowledge sources from the Ministry of Agriculture. To which the minister of the branch, Luis Planas, adds in social networks: “The European Union must firmly and intelligently use the means at its disposal to eliminate the tariffs that weigh, unfairly, on the agri-food sector.”

The Ministry of Industry, Commerce and Tourism agrees with this reading. In fact, Minister Reyes Maroto assured on the same Tuesday that she expects the restart of negotiations to prevent the EU from applying the tariffs. “The measures adopted by the United States have disproportionately and unfairly penalized the Spanish agri-food industry, a sector that is alien to the conflict,” insisted the Minister of Commerce.

It should be remembered that Washington applied sanctions to European products for an amount almost double that which is now authorized to the EU: 7.5 billion dollars (6.9 billion euros) for aid to Airbus. From Brussels it is understood that this is the last opportunity to agree with the Donald Trump Administration and offered to renounce retaliation if it withdraws its tariffs. Of course, he warned that in case of failure – again – in his attempt, he will act to defend his interests. In short, either there is an agreement or there is an escalation of the trade war that will harm both sides of the Atlantic.

“In the absence of a negotiated solution, and if the US countermeasures are not eliminated, the European Union will be obliged to exercise its rights to impose the appropriate tariff countermeasures,” said the Ministry of Industry, Commerce and Tourism in its statement, in line with what was expressed by Valdis Dombrovskis, executive vice president of the European Commission, as soon as the WTO decision was made. It remains to be seen whether this time Brussels achieves its goal.

In this context of a trade war, no scenario is ruled out. In fact, Europe already has a list of imported products that could be sanctioned. Among them, agricultural and industrial goods, wines, alcoholic beverages (rum, vodka), video game consoles, electronic games and vehicles (helicopters and other types of aircraft). The Trump Administration, meanwhile, received the WTO’s decision lukewarm: Trade Minister Robert Lighthizer understands that the EU has no guarantee to retaliate because Boeing stopped obtaining aid from the State of Washington, the only ones recognized by the Trump Administration. The chess game continues.

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