CITRUS INDUSTRY BELIEVES TARIFF WILL ESCAPE PACT

Publication: Palm Beach Post
Printed: Thursday, June 3, 2004
Written by: Susan Salisbury

Florida's citrus industry believes a 29.7-cents-a-gallon federal tariff on orange juice from Brazil could be safe.

U.S. negotiators working on the proposed Free Trade Area of the Americas pact have indicated they intend to leave some import-sensitive agricultural products off the table but did not specifically list the products, according to reports published after a May 21 meeting between U.S. and Brazilian negotiators.

" It definitely shows a recognition of the trade sensitivity of citrus as we go forward," said Andy LaVigne, chief executive officer at Florida Citrus Mutual.

Robert Coker, senior vice president of U.S. Sugar Corp. in Clewiston, which owns Southern Gardens Citrus, said U.S. negotiators previously had said that no agricultural products would be exempt from the FTAA.

"They have now given a fairly clear signal that there will be import-sensitive commodities that will be exempted," Coker said. "Brazil was pretty unhappy about that."

Brazilian officials did not return calls for comment Wednesday. Brazil's FTAA co-chair Adhemar Bahadian called the U.S. proposal "unpleasant" and a "surprise" when it was first discussed in May, according to Reuters.

Although it's not clear which products will remain protected by trade barriers, the assumption both sides are making is that orange juice probably will be one of them.

At November's FTAA talks in Miami, negotiators agreed to a two-tiered agreement, sometimes referred to as "FTAA lite," that allows countries to be part of either a basic agreement or a more detailed agreement.

Market access is one of the many issues under discussion, said an official with the U.S. Trade Representative's office, who, under diplomatic custom, cannot be identified by name.

"How do you bring that into conformity with the Miami framework with the two tracks?" the official said Wednesday. "The U.S. recently put forward a proposal to Brazil to ensure sufficient flexibility so the parties can agree on a common set of rights and obligations.

"It is our view that the scope of rights, i.e., what you are getting, must be synchronized with the scope of obligations you are giving," the official said. "The ambitions level must be balanced. It is only natural that now in this two-track approach the common set will be more limited."

Florida growers contend that any reduction in the tariff would devastate the unsubsidized Florida orange juice industry and create a monopoly for Brazil, the world's largest orange juice producer.

The U.S. and Brazilian co-chairs of the proposed 34-nation FTAA began talks again Wednesday in the Argentine capital of Buenos Aires.

Trade ministers had a major summit in Miami in November and are expected to continue negotiations in Brazil in July or August.

Chris Slevin, spokesman for Washington, D.C.-based Public Citizen's Global Trade Watch, said the less Brazil and other countries have to gain from increased market access for agricultural products, the less an FTAA makes sense for them.

"It comes down to a question of: 'What do they have to gain by this approach?' " Slevin said.