The United States did not comply with international trade rules when it imposed rates between 30% and 44% on imports of Spanish black olives, the World Trade Organization ruled on Friday. The European Union had appealed the US decision to the international organization, which finally agreed on the main arguments for which the lawsuit was filed, although it did not do so in each of them. The decision was made in Brussels because, although the case was not about a large volume of trade, it contained the seeds of what could be a gigantic problem for the European Union, since it could not be called into question less than assistance from common farming. Policy (CAP).
The final conclusion of the WTO panel that analyzed the issue is the question of the United States It adapts its decision to international trade rules and even refuses to enter into the merits of “all the allegations made by the European Union against the contested measures” by “finding that [Washington] May in many cases act in a way that is inconsistent with the obligations [legales]The strength of these phrases does not mean that the condition affecting so many Andalusian farmers and producers of black table olives will end here.
Now many options are open. The first is for Washington to appeal the decision, which could impede the process, because WTO arbitral tribunals are prohibited precisely because the US prevents the appointment of new arbitrators and has led to the collapse of this court. However, in this case, the European Union may impose sanctions in response. Another way out is for the Biden administration to inform the World Trade Organization – which has a 30-day deadline – of its intent to comply with what the report calls for, something that could be complicated in some ways, as it requires congressional approval. In this second track, if the EU does not comply with the US decision, the door opens to another lawsuit that may extend the case for several more years. Facing this perspective, a senior Spanish Trade Ministry official explained to EL PAÍS that he was in talks with Washington and hoped that a solution would come through negotiation with the WTO decision on the table.
The final imposition of customs duties on black olives in August 2018 caused a significant decrease in Spanish exports of this product, although there were preliminary sanctions a few months ago. Prior to this action, sales in the United States amounted to 67 million euros. In 2019, the first full year with the rates in effect and without the pandemic affecting trade, exports remained at 26 million, down 61%, according to European Commission data.
The argument the Donald Trump administration used to impose the tariffs was that Spanish producers received subsidies and that the money was transferred directly to the exporting companies. The EU appealed to the Geneva-based body in January 2019 claiming that the EU was no longer providing production aid after the CAP reform and that, in addition, the assumption that the aid was going to companies was “erroneous”. The WTO agreed with Brussels on the first point, as can be read in the Committee’s opinion, when it states that the Department of Commerce “has not examined the rules and has duly taken into account” the rules governing CAP payments and that it “was based on false factual findings”.
The report released on Friday also notes that there is a point in US tariff law – the 1930 regulation – that is inconsistent with GATT (the General Agreement on Tariffs and Trade of 1994). This is the point that calls for legislative change in the Washington Congress, something that seems complicated, given the current climate of polarization in North American politics, and even more so in matters of international trade.
Although the WTO decision agrees with Brussels on the “key point”, as the Commission stated in its statement, the ruling does not fully satisfy the EU’s claims, especially in matters relating to anti-dumping or regulation against unfair competition.
Once the decision was learned, the Spanish government demanded that the Joseph Biden administration scrap the tariffs that the Commerce Department had imposed in 2018, with Donald Trump in power. Confirmed Commerce Minister, Reyes Maroto, who described the decision as a “big step to reach a final solution” and demanded that the United States eliminate tariffs. A week ago, a senior official in this department explained to EL PAÍS that the Executive was in talks with Washington and hoped that a solution would come through negotiation with the WTO decision on the table.
“The Commission’s efforts to vigorously defend the interests and rights of EU producers, in this case Spanish black olive producers, are bearing fruit,” said Commission Vice-President and Head of Trade, Valdis Dombrovskis, after learning of the failure. The WTO confirmed our allegations that the anti-subsidy duties were unjustified and violated WTO rules. These duties seriously affected Spanish olive producers, as they caused a sharp decline in their exports to the United States. We now hope that the United States will take appropriate measures to implement the WTO decision, so that the export of black olives from Spain to that country can resume under normal circumstances.”
This Friday’s decision adds to another victory for Spanish producers in January 2020. Then the US Federal International Trade Court has already ruled, following a lawsuit from the Association of Table Olive Exporters and Manufacturers (Asemesa), against protectionist retaliation. from Washington.
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