Dairy, Ag Groups Urge US, EU To Deepen Talks To End EU Retaliatory Tariffs

Some 21 US dairy, food and agricultural organizations on Wednesday asked US Trade Representative Robert Lighthizer to “deepen trade discussions” with the European Union (EU) in order to bring about WTO compliance and removal of EU retaliatory tariffs targeting US food and agricultural exports.

Last week, the EU imposed retaliatory tariffs worth $4 billion against the US in the long-running Boeing dispute. The tariffs include 25 percent additional duties on three tariff lines of cheese, as well as on certain milk protein products, as well as agricultural equipment, distilled spirits, potatoes, nuts, fruits, juices, chocolate and ketchup, among other products.

The letter to Lighthizer was led by Farmers for Free Trade and the Distilled Spirits Council of the United States, and was also signed by, among others, the International Dairy Foods Association, National Milk Producers Federation, US Dairy Export Council, American Farm Bureau Federation, National Council of Farmer Cooperatives, National Confectioners Association, North American Meat Institute, National Corn Growers Association, and American Soybean Association.

“We are writing today to urge you to continue engaging the EU to secure the removal of compensatory and retaliatory tariffs on American food and agricultural exporters and to address bilateral compliance matters,” the groups wrote in their letter to Lighthizer.

“In addition to these tariff concerns, many non-tariff barriers also impede US food and agricultural exports to the EU that merit resolution,” the letter continued.

The traditional US agricultural trade surplus “is in desperate need of new markets. Accordingly, protecting and expanding US food, beverage and agricultural exports to Europe should be a top priority,” the letter stated.

The EU first levied a 25 percent tariff on US food and agricultural exports, including US whiskey, sweet corn, orange juice, and rice, in June 2018 in response to US tariffs on steel and aluminum. The tariff on certain products will increase to 50 percent in June 2021, according to the letter.

In October 2019, the US imposed tariffs on certain EU food and agriculutural exports, including cheese, butter, olive oil, pork, clams, distilled spirits and wines in connection with the long-running Airbus dispute, the letter pointed out. And then last week, the EU imposed tariffs on a wide range of US food and agricultural exports as a result of the Boeing dispute.

“This escalation of tariffs on US food and agricultural exports will only further impact the competitiveness of our industries and erode important market share,” the letter said.

“Given existing disruptions to trade, the impact of COVID, and weather-related events that have hit farmers this year, American food and agriculture needs stability, predictability and the ability to grow exports,” the letter added.

“For these reasons, we strongly urge the US and EU to deepen trade discussions in order to bring about WTO compliance and therefore allow for the removal of tariffs to help unlock the opportunity for our producers to successfully access the European market,” the letter added.

“Concomitant with that goal, we also urge the uprooting of unfounded EU non-tariff barriers that impede the American food and agriculture sector’s ability to fully realize the potential opportunities in the EU.”

“Farmers are battling to stay above water and any new tariff in this time of crisis is a big concern,” said Brian Kuehl, co-executive director of Farmers for Free Trade. “We know these tariffs are part of a long legal battle but any time farmers become collateral damage is unacceptable.

“American farmers need stability and that means predictable exports into markets like the EU,” Kuehl continued. “We are urging this administration and the next one to double down on their efforts to resolve this dispute in a manner that frees our farmers from harmful tariffs.”

“The escalation of tariffs on the EU and US spirits industry is compounding the severe economic crisis distilleries, restaurants and bars are facing as a result of COVID-19,” said Robert Maron, vice president for international trade for the Distilled Spirits Council of the United States, who noted that American Whiskey exports to the EU have dropped by 41 percent since the EU’s 25 percent retaliatory tariff went into effect in June 2018. “We need the US and EU to get back to the negotiating table to immediately eliminate these tariffs to help protect hospitality jobs on both sides of the Atlantic.”

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