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March 14, 2016

INTERNATIONAL TRADE: WG Launches Webpage to Monitor Issues & Opportunities

In response to quickly expanding activity in the international trade arena, last month Western Growers launched a webpage dedicated to that sector.

Western Growers’ members in California, Arizona and Colorado not only feed U.S. consumers, but they also feed the world.  Many members now do business globally, exporting specialty crop products to a variety of foreign markets that include several Asian countries where demand is strong.  In fact, according to the United States Department of Agriculture, U.S. vegetable, fruit and tree nut exports topped over $14 billion in 2014 with Western Growers’ members contributing heavily to those totals.

Robust exports combined with hot issues like Trade Promotion Authority (TPA), the Trans-Pacific Partnership (TPP), a West Coast port strike and negotiations to create a Canadian risk mitigation tool for U.S. produce companies have made international trade issues top of mind for many.

These are some of the specific reasons Western Growers developed this export-oriented webpage.  This dedicated internet space is located on the Western Growers’ website and contains a wealth of information members can tap to assist them with their global operations.

Matt McInerney, senior executive vice president of Western Growers, led the charge to get the page established. “Everyday staff engages with members about trade issues affecting their businesses.  With members importing and exporting commodities around the globe and with trade issues being so prominent on the political scene, it was obvious that we needed to provide members with a convenient resource, a one-stop shop that could address most of their basic questions,” he said.

The webpage contains information on trade agreements, phytosanitary requirements and tariffs in foreign countries, as well as convenient links to various USDA foreign offices and the Global Maximum Residue Level (MRL) Database.  Country specific information is available on the following countries: Argentina, Australia, Bosnia and Herzegovina, Brazil, Chile, China, Colombia, Costa Rica, Egypt, the European Union, Hong Kong, India, Indonesia, Israel, Japan, Korea, Mexico, New Zealand, Peru, Philippines, Singapore, South Africa, Sri Lanka, Taiwan, Ukraine, Uruguay, and Vietnam.

The MRL database, which provides free information (sponsored by USDA), is managed by a third party entity.  The third party entity also offers a premium paid subscription that provides additional information beyond the MRL comparisons.  However, for the purpose of comparing current U.S. MRLs against foreign country MRLs, the free subscription is sufficient.

In the future, Western Growers will also be posting positon papers and statements on trade related matters to keep members apprised of the organization’s official policy goals.

With many Asian markets being particularly important to members, the following is an overview of trade scenarios in Japan, South Korea and Taiwan that include the type of phytosanitary, tariff and MRL information that can be found on the page:

 

Japan

Japan imported nearly $800 million in fresh vegetables, fruit, and tree nuts in 2014, making it the largest Pacific Rim market for fresh produce commodities.  Japan is part of the Trans-Pacific Partnership (TPP), which when finalized and implemented will offer Western Growers’ members even greater marketing potential.

Currently, most fresh vegetable tariffs for Japan range from 3 to 6 percent.  Under TPP, most vegetable tariffs will be eliminated immediately.  Fruit tariffs, currently most are ranging from 4 to 32 percent, will see phased tariff elimination timeframes that will start immediately after implementation to 11 years post implementation. Tree nuts tariffs will be eliminated immediately.

Japan maintains strict adherence in the enforcement of maximum residue levels for pesticides.  Exporters should consult the MRL database on the International Page prior to shipping.

 

South Korea

South Korea entered into a free trade agreement with the United States that became effective on March 15, 2012. As of 2015, exports of fresh produce commodities reached nearly $721 million, with many commodities experiencing significant growth since implementation of the agreement. While tariff reductions will be phased in over several years from the implementation date, exporters are already seeing benefits from the free trade agreement.

 

Taiwan

Despite some high tariffs, Taiwan is a growing market and imported approximately $386 million in 2015.  Most vegetable tariffs are at 20 percent.  Tree nuts face lower tariffs that top off at 3 percent.  Fresh fruit tariffs range from 7 to 35 percent, with citrus facing the highest tariffs.  Taiwan is very strict when it comes to enforcing maximum pesticide residue levels, and exporters should be cautious in making sure they are in compliance with Taiwan’s MRLs.

 

While the webpage has been designed to answer many questions, there may be policy or business questions that it can’t answer.  If that’s the case, there is a function at the bottom that allows members to submit specific inquiries to the WG staff in both Irvine and Washington, D.C.  Both the questions and responses will be kept confidential.