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World Trade Situation and Policy Updates
Horticultural Products Account for Two Thirds of the Beef Hormone Retaliation Value
On July 19, 1999, the United States Trade Representative (USTR) announced the final list of products from the European Union (EU) on which the United States will impose 100 percent ad valorem duties in response to the EU’s failure to comply with a World Trade Organization (WTO) finding that the EU’s import ban on beef produced with growth hormones is inconsistent with WTO rules. WTO arbitrators determined that the EU beef ban results in a significant loss to U.S. beef exports and that the United States is entitled to suspend tariff concessions covering imports from the EU in the amount of $116.8 million. A notice announcing the imposition of the 100-percent duty on the products listed below will be published in the Federal Register. The imposition of duties will be effective with respect to goods entered or withdrawn from warehouses, on or after July 29, 1999.
U.S. and New Zealand kiwifruit industries settle dumping issue, pledge joint U.S. market promotions. On July 21 ,1999 the California Kiwifruit Commission (CKC) and Kiwifruit New Zealand (KNZ) announced an agreement to cooperate on efforts to revoke the eight-year-old antidumping-duty order against New Zealand kiwifruit. In addition, the two grower organizations agreed to pool funds to conduct generic market promotion efforts designed to build a better, year-round kiwifruit market in the United States. Under the agreement, KNZ will contribute $150,000 over three years for joint promotional activities to run in the fall months. The CKC will lead the new campaign, which will stand apart from both industries existing promotional programs. New Zealand supplies the U.S. market during the spring and summer while U.S. producers market during the fall and winter. The 1998 U.S. kiwifruit crop was valued at over $24 million and imports from new Zealand totaled over $11 million.
ITC rules affirmatively on injury in Chinese apple juice dumping case. On July 22, the U.S. International Trade Commission (ITC) issued a preliminary affirmative finding (by a vote of 5 to 0) that imports of concentrated apple juice (CAJ) from China are causing injury or threat of injury to the U.S. industry. This decision clears the way for the Department of Commerce to continue with its determination of a preliminary dumping margin, an action that is expected to be completed by November 15. Should the Department of Commerce make an affirmative dumping determination, the case would go back to ITC for a final ruling on injury. The industry is requesting in its petition the imposition of a 91-percent antidumping-duty on the Chinese product, based on charges that China is selling CAJ in the United States at prices 91 percent below its cost of production. In recent years, China has become a major world apple juice producer and a significant supplier to the U.S. market. According to Census Bureau data, China supplied almost 20 percent of total U.S. CAJ imports in 1998, compared to 1 percent in 1995. CAJ imports from China during the period January-May 1999 were 100 percent above shipments for the same period in the preceding year, accounting for 23 percent of total imports.
Association of Coffee Producing Countries Sets Unprecedented 2-Year Export Target: On July 7, the Association of Coffee Producing Countries (ACPC) announced July-June export targets for its producing-member countries totaling 50 million 60-kilogram bags annually for 1999/00 and 2000/01. This is the first time that the ACPC announced a plan covering two years; prior plans covered only one. The 1998/99 export target total was 52.13 million bags. Brazil’s target, the world’s largest coffee producer, has been set at 15.0 million bags for 1999/00 and 17.0 million bags for 2000/01. Brazil actions during 1998/99 angered other coffee-producing countries when it exported a reported 21 million bags when its export target had been set at 15 million bags. The ACPC has set Brazil’s 2000/01 target 2 million bags higher than the 1999/00 target because of reports that Brazil’s 2000/01 crop may be a record. Other countries export targets for 1999/00 and 2000/01 are in 1,000 bags: Colombia, 10,346 and 9,754; Indonesia, 5,683 and 5,358; Central America, 6,994 and 6,595; Venezuela, 321 and 302; Africa, 11,657 and 10,991.
First shipment of U.S. apples arrives in India: According to the U.S. Agricultural Counselor in New Delhi the first 2 container shipments of U.S. apples arrived on July 1 in Mumbai (Bombay), with approximately 10 more scheduled to arrive in the near future. This development follows India’s import policy liberalization of April 1, 1999, which provided market access to apples and a number of other previously banned agricultural products. Moreover, this year's anticipated reduced domestic crop may provide a good opportunity for U.S. apples to become established in the market, particularly during India’s off-season (March-July). However, high tariffs and the absence of an efficient distribution system could hamper initial market penetration efforts. Nevertheless, the Indian market shows significant potential as a market for U.S. apples, with an estimated 200 million consumers prepared to pay a higher price for apples during the off-season and an estimated 10 to 20 million consumers prepared to pay a premium for high-quality apples. It is expected that U.S. suppliers will face competition from Australia and New Zealand in meeting India’s demand for imported apples.
California stone fruit now permitted into British Columbia without fumigation. On June 30, 1999, APHIS and the Canadian Food Inspection Agency reached an agreement on a pilot systems approach control program for oriental fruit moth (OFM) that will permit California stone fruit (peaches, nectarines and apricots) to enter British Columbia without fumigation. In the past, fumigation with methyl bromide was mandatory. Eliminating the treatment requirement represents an important development, as fumigation tends to degrade the quality of the fruit, and shorten shelf-life. California is the leading producer of stone fruit in the United States, accounting for a large percentage of total U.S. exports. Under the systems approach, a series of pest mitigation measures are combined to reduce the OFM risk to an acceptable level. Canada is the largest market for U.S. stone fruit exports, with 1998 shipments totaling 71,758 tons ($60 million). Moreover, about half the volume of total U.S. peach and nectarine exports go to Canada annually.
Fruit trade reports continued problems with Venezuela’s phytosanitary import permits. Despite reports last month that Venezuela’s APHIS equivalent, SASA, had resumed issuing phytosanitary import permits for U.S. fresh produce, trade sources representing stone fruit and tomato interests are reporting that imports continue to be hampered by difficulties associated with obtaining the needed permits. The U.S. Agricultural Attaché in Caracas is following-up on the problem. U.S. exports of fresh fruits and vegetables to Venezuela in CY1998 were valued at $16.5 million, with apples, grapes, and pears accounting for a large percentage of the total.
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