Almost a hundred companies in the Region of Murcia that export and opened the market in the United States, most of the agri-food sector, have received with relief the agreement between the European Union and the US Administration. Thus, the long trade war that was unleashed two decades ago by European aid to the Boeing and Airbus companies is temporarily put on hold. It is a conflict whose consequences have penalized the agri-food sector, which had nothing to do with the war of the aeronautical giants. The tightening of tariffs, of up to 25% in some cases, affected sales of wines, oils, cheeses and canned olives, among other products, while at the same time closing the way to lemon, which was experiencing strong growth. This tariff barrier will be suspended for five years.
Murcian producers and exporters trust that the transitional measure will become definitive. On the occasion of Biden’s arrival at the White House earlier this year, Murcian producers and exporters trusted that the new president would lift or soften the punishment imposed by the Trump Administration. The compromise reached yesterday at the first bilateral summit between Biden and the President of the European Council, Charles Michel, and the President of the European Commission, Ursula von der Leyen, will be reflected in a joint statement with a “multi-year” roadmap to resolve differences, reports Europa Press. The first step to ease tensions was taken in March. The conflict has resulted in 10.3 billion euros of reciprocal penalties.
Before tariffs were hardened, Murcian agri-food companies saw the US in 2018 products worth 40 million. Then, they were put on the ‘black list’ of the trade war, which worsened during the term of Donald Trump. Wine exports, which depended on the North American market for 16.2%, had a turnover of 16 million euros that year; while spirits (only two companies sell to the US) at 5.5 million euros, with a dependency of 17%.
Before the ‘black list’, agri-food products worth € 40 million per year were sold to North America
The ICEX report
A study carried out in 2019 by the Territorial Directorate of Commerce-ICEX pointed out that, in the worst scenario, losses could reach 40 million euros per year. Some products were going to be severely affected, such as fresh cheese, which had a 99.6% dependence on the US market; while other types of cheeses reached 69.7%. Both varieties had sales of 14 million euros per year. Spain has been one of the countries most affected by the tariffs that are now being suspended.
- Juan Marín. Pte. Proexport
“We expect the US market for peppers to open; we sell more in Canada thanks to the current treaty »
- Angel Gil. Gil Family Vineyards
“The alliance between the EU and the US is good news, although the uncertainty persists for five years”
- José García Gómez. Pte. Agrupal
«Benefits the peach, fruit cocktail and pear; the agreement is good to be able to compete in the United States »
- José A. García. Dtor. Ailimpo
“The news comes at a very good time to plan the campaign; our goal is to export 25,000 tons every year »
- Antonio Luengo. With. Agriculture
“It was not fair to tax business relationships for matters that had nothing to do with our agri-food sector”
The Minister of Agriculture, Antonio Luengo, stressed that the agreement “is hopeful and positive.” “We have been demanding it for many years, defending our producers and exporters in all forums to unblock this unfair decision that punished those who least deserved it. Now we are going to study the tariffs on each of the affected products and there we must be vigilant. It was not fair to tax business relationships for issues that had nothing to do with the agri-food sector, which has a potential market in the United States, “he said.
José Antonio García, director of Ailimpo, indicated that he will be able to execute the lemon promotion plan in the United States for the next three years. “Our goal is to export 25,000 tons per season.” He considered the agreement “excellent news, which also comes at a very appropriate time, since it allows us to plan with our clients the exports for the fine lemon campaign, which will begin in October. It allows us to work without uncertainty in the medium term ”.
The conflict also closed the lemon market, which now has the doors open to grow
The president of Agrupal, José García Gómez, believes that “the agreement affects the peach, fruit cocktail and pear.” «The peach already had an 18% tax, to which another 25% penalty was added. We are back at 18% ». These games are not very significant, but it is always good to be able to compete ».
Juan Marín Bravo, president of Proexport, considers that the problem in his sector “is not one of tariffs, but of market access, since there are no phytosanitary protocols in force.” “We have been waiting for the opening for peppers for two years, but no progress has been made. Sales to the US are minimal, while with Canada, thanks to the fact that there is a free trade agreement with the EU, they are continuously growing.
The winemakers hope that the agreement will be final
For Ángel Gil, co-owner of the Jumillano wine group Viñas Familia Gil, this announcement “is very good news, especially for what a commercial alliance of the EU and the United States can represent.” It regrets, however, that “uncertainty remains for five years” for tariffs. In addition, Gil warned that this agreement “could be the preamble to a trade war against China, something that is always bad, although for us, as a company, the American market is much more important than the Asian one. This type of possible confrontations, however, always have a negative part, “he said.
The president of the Regulatory Council of the PDO Jumilla, Silvano García, also expressed his satisfaction with the agreement. “The United States is a very important market for Jumilla wine and it is very important to remove this type of obstacle, which has been a big problem, especially for small wineries.” He highlighted that the first agreement in this regard was in force for two months; This will last for five years, “so it could be considered as definitive.” He recalled the work that has been done for a long time to strengthen sales in the US “For now, we have to continue in the same line, to reach higher levels in the number of bottles exported to North American countries.”