As Chris Kay of Carter Imports commented when signing a North American Olive Oil Association (NAOOA) petition, he is concerned “that tariffs may be imposed on many European exports, including olive oil, due to a trade dispute between two airplane manufacturers.” Yet “these proposed tariffs [would] do nothing to fix the issues between Boeing and Airbus.”
In fact, Kay considers it “ridiculous” to even consider olive oil and airplane manufacturers in the same sentence. As the owner of a Greek product import business, he is concerned that the Trump administration may impose tariffs on European olive oil, because “these additional costs [would] hurt small businesses like mine,” both in the USA and abroad. They could also affect “hundreds to thousands of jobs and relationships cultivated across the globe.”
Kay would prefer “that we talk about a global economy in this way: we work with Greek producers that harvest excellent, authentic products; they use local trucks to move products to port; ports move those products to other countries. Once in the U.S., a U.S. agent receives the product, uses U.S. trucks and trains to move olive oil across the U.S., and we bring that here to California. In the course of a single order, we may be utilizing 30 different companies on two continents! Think about the volume of good that does with jobs, employment, and investment! To catch many small producers, importers, and exporters in this trade dispute causes more harm than good, and will have consequences that are far reaching; not just in Europe, but in the United States as well.” Numerous American stores, restaurants, and food manufacturers would also be affected.
Kay concluded his appeal, one of many attached to the NAOOA’s petition, by saying “we strongly urge you to remove olive oil from your list of proposed tariffs.” With family still living in Greece, this Greek American gave Greek Liquid Gold additional reasons for his entreaty. “After years of economic turmoil and a business model of selling in bulk to Italy and Spain, you have a lot of enterprising Greeks realizing they make GREAT olive oil who are starting to break into the U.S. market with their own brands. It’s gaining traction, and tariffs would really hurt the momentum we’re building. We’re the third largest producer of olive oil in the world; Americans should know we [Greeks] make great Extra Virgin Olive Oil too!”
However, high taxes could be imposed on products imported from countries that do not have any Airbus factories, including Greece. The North American Olive Oil Association (NAOOA), a nonprofit trade group of olive oil marketers in North America whose members represent more than two thirds of the olive oil consumed in the U.S. and Canada, has been leading a campaign against such tariffs. That campaign includes the “Don't Tax Our Health!” petition to Remove European Olive Oil from the Proposed List of Retaliatory Tariffs that Kay and 950 others had signed by May 28, when it was delivered to the US Trade Representative (USTR).
As NAOOA executive director Joseph R. Profaci reported to Greek Liquid Gold, “during the period for public comment to the United States Trade Representative, I provided oral testimony at the hearing in Washington and submitted detailed written comments, seeking to distinguish olive oil from the other products on the list [of European products that may be subject to new tariffs] on the basis that 1) olive oil is a health food, so the tariff would be tantamount to a tax on health, and 2) the U.S. cannot produce more than 5% of U.S. demand”—sometimes less.
The NAOOA petition mentions that “Americans have no realistic alternative supply in place of European olive oil, which typically accounts for over 70% of the world’s annual production…. The U.S. consumes approximately 300,000 metric tons of olive oil [annually], and the United States itself produced only 10,000 metric tons in 2018-19.” As a letter from two members of Congress to the USTR says, “even if all non-EU olive oil available for export was to be exported to the United States, there would still be a shortage of about 100,000 tons, or 30 percent of current consumer demand.”
Therefore, the NAOOA petition asks the USTR “to remove olive oil from the list to empower American consumers to follow healthy eating patterns,” as their healthcare providers and the US government advise. “Olive oil is one of the healthiest foods we can eat. The FDA has recognized olive oil as a food beneficial for cardiovascular health, but its benefits go well beyond that. The USDA’s Dietary Guidelines for Americans recommended the Mediterranean Diet, for which olive oil is a principal component, as one of three healthy dietary eating patterns. Scientific consultant company Exponent has estimated that getting Americans to increase adherence to the Mediterranean Diet will result in a $20 billion dollar savings in treatment for many ailments beyond heart disease, including cancer, diabetes and dementia. In fact, popular diet doctor and cardiac surgeon Steven Gundry, M.D. has gone so far as to say ‘the whole purpose of food is to get olive oil into your mouth!’"
As noted on the petition, a 2018 study “confirmed that health is a principal factor that leads Americans to purchase olive oil. So a tariff on European olive oil primarily will punish American consumers who will either have to pay increased prices for olive oils, or switch to less healthy--or even unhealthy--but cheaper cooking fats.” If pharmaceuticals and medical devices and equipment can be left off the list of products that could be subject to tariffs—as they have been—the NAOOA petition argues that olive oil, “the only product on the USTR's exhaustive proposed list that is recommended by American doctors, nutritionists and dietitians to their patients for the prevention or treatment of chronic diseases,” should be omitted from the list as well.
As the NAOOA’s Joseph Profaci informed Greek Liquid Gold, his organization is now focusing on informing the public about the proposed tariffs and the likely consequences, as well as “lobbying elected officials in Congress to use whatever influence they might have to persuade the Trump administration to take olive oil off the list. We feel we are making some progress in getting support in the U.S. Congress, but the discretion on the tariffs remains within the administration.”
Profaci has been told that the WTO arbitrator is likely to “make a decision on the damages the U.S. is entitled to collect by tariff sometime in September. Soon after that, the tariffs could go into effect, depending on how much the damage award is. In such retaliation cases as these, the amount of the tariff is typically 100% of the value, which will likely more than double prices, and result in a shortage of olive oil in the U.S. So for consumers, it will mean higher prices, and lower consumption” if olive oil remains on the list.
However, there is still hope for American olive oil lovers and all the American and European individuals working with olive oil, transportation, food services, and manufacturing that could be affected by retaliatory tariffs on olive oil. The WTO arbitrator’s decision has not yet been made, and it is still unclear what the Trump administration will do about olive oil. Moreover, as Profaci concludes, “if the USTR agrees to remove any products from the list [of goods subject to tariffs], I believe we have done all that we can do to put olive oil in a favorable position.” What can ordinary citizens do? Profaci still encourages concerned Americans to contact their representatives in Congress to ask them to support a letter requesting that the USTR remove olive oil from the list.
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UPDATE, September 19, 2019: According to information from communications to North American Olive Oil Association (NAOOA) members, “an article in the Olive Oil Times suggesting that the WTO [World Trade Organization] has delayed its decision in the Airbus case until the end of 2020” was mistaken, and that erroneous article was removed from the publication. On September 13, the NAOOA announced that they “continue to believe that the results will be released on September 30, and that the U.S. will announce its final tariff list at that time.” The NAOOA added, “before the U.S. tariffs could be made effective, however, they will have to be approved at a meeting of the WTO’s Dispute Settlement Board. The earliest DSB meeting currently scheduled after September 30 would be on October 28, 2019.”
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