Spanish Olive Exports to the US Falling on Prolongated Tariffs Dispute

Published 2023년 2월 3일

The European Union and the United States' battle over Spanish olive tariffs has caused a drop of 70% in exports of black olives to the US since the beginning of the dispute. Over the last four years, it is calculated that the loss for Spanish olive exporters is worth USD 70 million in value. While the Spanish olive cooperatives in Spain have taken their case to the WTO regulations, the black olive US market is filled with other origins unaffected by the dispute. The damage caused to the Spanish olive industry due to the US tariff imposition has been crucial. As a result, Spanish producers are now requesting support from the EU’s Agricultural Commission.

The US International Trade Commission (USITC) imposed tariffs in 2018 on imports of olives, claiming that a disproportionate amount of EU subsidies directed to Spanish olive producers were harming their US counterparts. The subsidies that the USITC refers to are the ones granted by the Common Agricultural Policy (CAP), the EU’s agricultural commission that aims to support farmers in the EU region and ensures Europe’s food security. As a result, the USITC confirmed a tariff imposition ranging from 8% to 35% for different table olive types.

According to the Table Olive Agri-food Cooperatives of Spain, the tariffs imposed by the United States on their black olives have caused a 70% drop in export volume. The Cooperatives also claimed damage caused to the industry of about USD 70 million since 2018, when the tariffs entered into place. In November 2021, the World Trade Organisation (WTO) ruled that the US “had acted in several instances inconsistently with its obligations” and urged the country to comply with the resolution by 14 January 2022. However, the trade imposition has been going on for over five years without significant changes in practice.

Green olive imports from Spain currently face a 25% tariff as part of a package of countermeasures granted to the US by the WTO. Separately, black olive imports from Spain face a combined 35% tariff. Tariffs were expected to be reduced after Spain convinced the USITC that it was not illegally subsidizing its farmers, which hasn’t been achieved so far.

According to International Olive Council (IOC) figures, table olives import volumes in the US have grown significantly over the past few decades. In the 1990/1991 season, the US imported 68 thousand mt of table olives. Such figures grew to 157.5 thousand mt in the 2021/2022 season. In 2017, before the tariff dispute, Spanish olive exports to the US totaled about USD 67 million. Today the US represents a large share of global table olive imports. The US is the leading export destination for Spanish olives, accounting for up to 35% of the American export market share. However, since the US tariff imposition, Spanish table olive exports to the US have continued to fall.

Due to the crucial damage US tariffs have done to the Spanish olive industry, the Spanish government has contacted the European Commission, urging it to open talks with the US about suspending import tariffs on Spanish table olives. Unfortunately, although the European Commission warned that the US tariffs violate WTO regulations, it refused to support producers with legal fees from the trade dispute. However, they will be granted rural development support under the CAP’s rural funding and promotion instruments to diversify markets and state aid.

The agri-food cooperatives of Spain are urging for proactive diplomacy to execute the order issued one year ago by the WTO. While the tariff dispute between both countries has been going on, Spanish olives have been losing critical market share in the US market to other olive-producing countries such as Portugal and Greece.