Commodity Fact Sheet
What’s the Outcome for Fruits and Nuts?
On February 8, 2004, the United States and Australia concluded negotiations on a Free Trade Agreement (FTA), and on February 13, 2004, President Bush notified Congress of the intent of the United States to enter into an FTA with Australia. The FTA contains commitments on most agricultural products, and addresses other trade measures between the two countries as well.
The current situation . . .Australia generally applies low tariffs on agricultural products, and for certain products such as grapes and raisins, applies a tariff of 5 percent instead of the 10 percent tariff permitted under rules of the World Trade Organization (WTO). While most U.S. fruits and nuts enter duty-free, Australia applies a 5 percent tariff on a number of fruit and nut products, including almonds, grapes, raisins, dried apricots, dried apples, dried plums, citrus juices, cranberry juice, fruit jams and jellies, and frozen strawberries. From 2001 to 2003, U.S. suppliers annually shipped on average $50 million worth of fruit and nut products to Australia, and the U.S. share of its import markets was 18 percent.
With the agreement . . . Australia locks in duty-free tariff treatment for all U.S. exports of fruits, fruit products, fruit juices and nuts. The immediate duty-free access resulting from this agreement will serve to protect and expand the import market that the U.S. supplies.
Separate from the FTA, Australia committed to addressing outstanding phytosanitary issues, including for apples, Florida citrus, and stone fruits.
United States Commitments
The current situation . . . Some fruit and nut products from Australia have faced ad valorem equivalent import tariffs as high as 30 percent, although the vast majority of fruit and nut products are subject to tariff rates of less than 2 percent. From 2001 through 2003, U.S. fruit and nut imports from Australia averaged $39 million, accounting for less than 1 percent of total U.S. fruit and nut imports.
With the agreement . . .Australia maintains or immediately gains duty-free access for nearly 60 percent of all fresh and processed fruit and nut products listed in Chapters 8 and 20 of the HTSUS. Currently the tariffs on these items are low or duty-free. This includes fresh oranges, tree nuts, mandarins, and strawberries. U.S. import tariffs on the remaining 40 percent of fruit and nut products, including pecans, dried apricots, peaches, pears, and canned fruit, will be phased out in equal annual steps over the next 4 to 18 years depending on the product.
The United States has also established preferential tariff-rate quotas (TRQs) for avocados. The in-season TRQ, which runs from February 1 to September 15, will allow duty-free access for 1,500 metric tons of avocados from Australia. With the out-of-season TRQ, which is in effect from September 16 to January 31, Australia may export 2,500 metric tons of avocados duty-free. Both quotas will begin the second year of the agreement and will be expanded by 1 percent each year over 18 years.
The United States maintains phytosanitary restrictions on many imports of Australian fruits, such as avocados and tropical fruit. Separate from the FTA, the United States has agreed to conduct import risk assessments on cherries, mangoes, avocados and certain tropical fruit.
The United States may impose an agricultural safeguard measure on certain horticultural products if import prices drop below a pre-determined level. These products include canned fruits, grape juice, and orange juice. The safeguard measure will be in place over the entire 18-year tariff phase-out period for these products.
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