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US tariffs on EU agri-food products: regions call for urgent compensation measures  

​ Widespread support from EU regions to compensate agri-food businesses affected by 25% tariffs on over 1.400 regional products including wine, cheese, olive oil and liquors

Trade disputes between the EU and the US are damaging exports of European regional agri-food products. In a plenary debate, EU cities and regions have expressed deep concern as US tariffs harm productive sectors, disturb local economies and affect a large number of family businesses. As a response to EU aid to Airbus, the US is imposing tariffs worth EUR6.9 billion affecting over 1.400 products since 18 October 2019.

Today, the European Committee of the Regions held a debate on the need to urgently compensate sectors affected by the tariffs recently imposed by the US government. The basis for the debate is a position paper presented by the Spanish delegation.

Numerous regions support the Spanish position paper, which urges the EU to compensate affected businesses urgently, to reach a fruitful settlement as to remedy the current situation and to plan mitigation measures for sectors and products that could be affected by upcoming EU-US litigation outcomes from the World Trade Organisation (WTO).

On behalf of the Spanish Delegation to the CoR, Joan Calabuig (ES/PES), Regional Secretary for the European Union and External Relations of the Valencia Region, said: "It is essential for the EU to introduce urgent compensatory measures to help all European agricultural and agri-food sectors adversely affected by the US countermeasures implemented as a result of EU aid to the aircraft manufacturer Airbus. Imposition of tariffs by the United States will affect local economies to the detriment of a large number of small family businesses. As WTO has several pending pronouncements, CoR calls the European Commission to work with a greater degree of foresight in devising mitigating measures for sectors that may be directly affected by the outcome of future litigation processes. " Spanish regions gather EUR 930 million annual trade for agri-food products with the US.

The US market is one of the main destinations for exports of European agricultural and agri-food products. Since 18 October 2019, US tariffs on EU aeronautical products are fixed at 10%, while the rest, mostly agri-food, are affected by a 25% tax rate.

Michael Murphy, (IE/EPP), Member of Tipperary County Council, Head of the Irish Delegation to the European Committee of the Regions, said: " I’m deeply concerned about the emerging negative impact that these sanctions are having on regions in Ireland which are heavily dependent on the agri-food sector, including my own region. These sanctions will result in a lose-lose situation for regions in both the EU and the US. Trade disputes destabilise productive ecosystems and their impacts are first and foremost felt at the local levels. Similarly, to Spain, Irish regions are carrying a significant burden of tariffs imposed by the US. It’s important that emergency support measures are put in place to mitigate these losses whilst the EU work on a negotiated solution to this dispute. As a rapporteur on a CoR Opinion on the Implementation of Free Trade Agreements , I look forward to working together with stakeholders and facilitating discussions on developing tools and methods that can be used to increase the uptake and understanding of FTAs , particularly among micro-enterprises and SMEs across all EU's regions ."

Ireland recorded goods exports to the US of EUR 39.4bn in 2018. The total value of Irish exports in 2018 subject to US measures is valued at EUR 366 million which at a rate of 25% would attract 91.6m EUR in additional tariffs. Exports from Irish regions of Irish cream liqueur and butter accounts for 44% and 95% respectively, of the total value of tariffs on these targeted goods.

Virginio Merola (IT/PES), Mayor of Bologna, declared: " The US trade tariffs are hurting hard the European agri-food producers and in particular the Italian well-known products. The European Union must adopt new support measures for the promotion and production of the agri-food sector. The Metropolitan City of Bologna and the Region Emilia-Romagna stand with their farmers and producers to protect their employment and economic opportunities, their work and revenues. "

Guillaume Cros (FR/PES) , Vice-President of the Occitan Region and CoR rapporteur on the Common Agricultural Policy commented: " the priority given to exports and imports has weakened the EU's farm sector. The EU's climate goal also prompts us to review our trade policy, giving priority to the European market and putting international trade in its proper place. That is why the CoR has called on the EU to use all its influence as the world's largest food importer and exporter to change the international agricultural trade rules so as to encourage greater fairness and solidarity in trade relations" .

Basílio Horta (PT/PES) , Mayor of Sintra, said: “ The EU must be able to protect and defend its citizens from the negative consequences of the US’s protectionist policies. International trade is vital for agriculture and agri-food products and its success is reflected in the quality of life of Europeans, in particular European producers. This should not be hindered, and EU compensation measures are necessary and urgent to this end. For the Municipality of Sintra and in the agri-food sector, the US market represents exports of around EUR 31,5 million and imports of around EUR 12 million. Thus, any protectionist measures in that country, in the form of new tariffs or other, will always adversely affect the municipality, its business fabric and its citizens.”

The Spanish position paper warns that the i mposition of tariffs may lead to an escalation of tax measures that will harm other productive sectors of both the United States and the European Union.

The paper calls for intensified communication between the United States and the European Union to reach a meaningful agreement that will remedy the current situation. It also stresses that trade agreements between the EU and third countries are essential for the development of the agricultural and agri-food sectors in European regions.

With more announcements expected from the WTO on the Airbus-Boeing dispute, the paper calls for the European Commission to set new parameters on aid to the aeronautic industry and for greater planning of mitigation measures of sectors affected by trade disputes.

Background

Contact: David Crous / david.crous@cor.europa.eu / +32 (0) 470 88 10 37