The European Commission has initiated on Friday the procedures to denounce to the World Trade Organization the tariffs imposed by the US on the imports of Spanish black olive, according to El Pais diplomatic sources. The EU body will try to demonstrate in Geneva the illegality of the Donald Trump administration's tariff penalty, which at the behest of several California companies imposed in 2017 new taxes that has risen to 34.75%.
The US accuses the Spanish farmers, particularly those of Andalusia where the production of black olives is concentrated, of monopolizing the market thanks to the subsidies they receive from the European Common Agricultural Policy (CAP).
Brussels, in addition to considering the accusation unjustified, fears that the tariff on the Andalusian black olives feels a dangerous precedent that allows Washington to question all the European agricultural subsidies, one of the essential pillars of Community policy and that they take almost 30% of the EU budget.
The European Trade Commissioner, Cecilia Malmström, was committed to the sector to counterattack in the WTO. But Brussels had so far focused on more serious conflicts with Trump, such as tariffs on exports of steel and aluminum. And in trying to avoid an escalation of commercial war that already threatened to harden the entry into the US market of the European automotive sector, especially the German one.
But this Friday, finally, the department of Malmström has taken the first step to defend the Andalusian black olive, informing the Trade Policy Committee that the complaint will be presented in the coming days, expected next week. On Monday, EU agriculture ministers meet in Brussels and, according to community sources, it is also foreseeable that the European Commissioner for Agriculture, Phil Hogan. Address the problem with the Spanish minister, Luis Planas.
Communication to the Committee allows the Commission to present the complaint in Geneva immediately because authorization from the Member States is not required. A step that, according to diplomatic sources, will not be delayed. The procedure in Geneva will start with the request for consultations to the US. If the consultations do not resolve the conflict, as expected, the WTO should settle the dispute. A process that can last for years.
The Commission has already set aside a budget of 2.5 million euros in 2019 to help black olive producers look for alternative markets to absorb the fall in demand in the US, where it has exploded in recent years due to its popularity as a complement in dishes such as pizza.
Trump's protectionism has hit hard at Andalusian companies in the sector, which had the largest export destination in the United States, with a volume equivalent to its sales in Italy, France, Germany and the United Kingdom. In August 2018, the first month of application of the definitive tax, sales to the US fell by 70%, from 3.2 million kilos in the same month of the previous year to just over one million kilo.