US Specialty Crops Trade Issues and Recommendations

1
US Specialty Crops Trade Issues and
Recommendations

• Thomas I. Wahl, Hayley H. Chouinard, Thomas L.
  Marsh, Thomas Schotzko, Christine Wieck, Armenak
  Markosyan
• IMPACT Center
• Washington State University
• and
• Timothy E. Josling
• Stanford University

2
Presentation of FindingsOn Specialty Crop
Interest Concerns

• Five Listening Sessions with 30 producers from
  Washington, Oregon and Idaho
• 4500 Surveys sent out to WA apple, cherry, pear,
  grape, hay, peach and other specialty crop
  producers
• 10 response gt 363 usable surveys
• Academic and government publications

3
Trade Issues Limit Success

• Specific Trade Concerns
• Tariffs Common Perception that the US is open,
  other countries are not, 12 vs. 62
• Non-tariff barriers including sanitary and
  phyto-sanitary barriers Common Perception that
  many are not based on Sound Science, long time to
  resolve, etc. (more later)
• Foreign subsidization of the industry
  Difficulty in traceback of measures for specialty
  crops that are often indirect, often problems
  with processed black olives in Spain that
  effect U.S. producers but rules only apply to
  like products
• Specialty crops have not been a priority in trade
  agreements yes and no depends on, UR perhaps,
  regional and bilaterals, maybe not as valid with
  attention to tomatoes in NAFTA, others in CAFTA,
  Chile, etc.

4
Trade Issues Limit Success

• Recommendations
• Support to Increase Industry Competitiveness
  Increase funding for research to decrease
  production, transportation and marketing costs
• Concentrate efforts on large export markets
  Concern much effort on FTAs with countries of
  little interest for specialty crops to some
  extent mitigated by new efforts with S. Korea
  (Taiwan, India, Japan?)
• Prioritize specialty crops in trade agreements
  with special attention to lowering non-tariff
  barriers horse has left the barn, sensitive
  products discussion in Doha, some attention in
  most recent regional and bi-laterals

5
Trade Remedies to Provide Domestic Protection

• Trade remedies are used to protect domestic
  production from disruptive trade flows.
• As US tariffs decrease, increased import pressure
  may increase the need for these remedies.

6
Trade Remedies to Provide Domestic Protection

• Current Abuses Involving Remedies Related to
  practices such as provisional duties until case
  is resolved, favorably or not and issue of threat
  to harm vs. actual harm, possibly used to
  restrict legitimate trade, marked increase in WTO
  anti-dumping cases
• Remedies act as an invitation for costly
  litigation deep pocket actors can tie up trade
  in the courts, small country disadvantage,
  learning curve for developing countries
• The definition of dumping is problematic
  problems with idea of normal profits,
  constructed costs and other issues make
  likelihood of favorable ruling positive
• Agriculture may need own rules but runs counter
  to trying to integrate agriculture into the
  general set of rules for trade, some precedent in
  UR special safeguard provisions for TRQ
  commodities, but too late to change the WTO rules
  to include more commodities?

7
Trade Remedies to Provide Domestic Protection

• Suggested Policy Options
• Employ remedies costly, lengthy, even if
  successful not always desired end results (eg.
  Fresh garlic from China)
• Attempt to decrease production costs to avoid
  needing remedies
• Encourage producers to shift production to other
  more competitive products

8
WTO Disputes Results

• US-Cotton Case may lead to changes that will
  allow program crop producers to switch to
  specialty crops in the US (fruit and vegetable
  planting restrictions)
• EU-Sugar Case may result in more disputes that
  may decrease EU subsidies, and limitation on US
  marketing regulations, Oxfam views on subsidies
  to EU processors of finished products like tomato
  paste, canned fruit, etc an linkage to local
  content rules. May also make US marketing orders
  a target based on perceived national treatment
  violations on quality restrictions

9
WTO Disputes Results

• Effects on Specialty Crops
• More production may reduce producer profits (-)
• Less foreign subsidization may increase US
  competitiveness ()
• As US farm bill must face changes, more emphasis
  on programs relevant to specialty crops may occur
  ()

10
Geographic Indicators

• Signs, symbols and names indicating a region in
  which a product has been produced
• These indicators differentiate products and may
  increase profits

11
Geographic Indicators

• Recommendations
• Protection occurs with the use of a registry, but
  countries differ as to how protection is granted.
  An international system would improve the
  usefulness of indicators
• Broad regional indicators appear to work best,
  and may improve the marketability of US specialty
  crops.

12
Invasive Species

• As the imports of specialty crops increases so
  does the concern of invasive species. Over 55
  of WA fruit growers rank prevention of invasive
  species as one of the most important US import
  policies.

13
Invasive Species

• Recommendations
• Increase funding for inspection of imports, and
  research to identify and mitigate invasive
  species problems (related to concerns over OHS
  takeover of border inspections with view toward
  issues broader than invasive species and lack of
  adequate resources for APHIS with expanded role
  and pressures from increasing import volumes)
• Investigate the costs and benefits of increased
  traceability of specialty crop products, more
  knowledge translate to greater ability to target
  imports from certain areas (commodity/country
  profiling)

14
Conclusions

• Trade is important and increasingly so for many
  specialty crops
• Trade issues are complex and difficult
• Change is evolutionary not revolutionary
• Likely are the forefront of issues list for
  specialty crop industry in 2007 Farm Bill debate