A Good Day for Free Trade and American Olive Oil Consumers

Between 98 and 99 percent of olive oil consumed in the US is imported.

Between 98 and 99 percent of olive oil consumed in the US is imported.

MAC (Washington, DC, June 21, 2013) — Yesterday, in a heavily lop-sided and bipartisan vote (343 to 91), members of Congress voted to delete a section of the Farm Bill that would have imposed what many believed was an indirect tax on American consumers. The provision in question would have required that each “lot” of imported olive oil be subjected to chemical and taste testing to insure that it met certain standards as defined by the relevant “marketing order.”

As argued by those promoting the amendment, “A marketing order would be utterly ineffective at imposing quality standards because the oil is tested only at the time it is produced or imported and does nothing about fraud that takes place once the product enters the U.S.”

Olive oil from Morocco

Olive oil from Morocco

Proponents of the amendment to eliminate the section, including the National Restaurant Association, Food Marketing Institute, Retail Industry Leaders Association, Heritage Action for America, and North American Olive Oil Association argued that adopting the market order on olive oil imports was in fact a trade barrier that would harm “many small U.S. companies all over the country who import olive oil for bottling and sale. It would severely restrict the supply and raise the price of olive oil for consumers…by making olive oil much harder and more expensive to import.”

Olive groves in Morocco, keeping up with Americans' love for quality olive oil.

Moroccan olive tree groves, keeping up with America’s love for quality olive oil.

Ironically, between 98 and 99 percent of olive oil consumed in the US is imported since California growers only meet 50 percent of American demand for table olives and less that 2 percent of demand for olive oil. At a time when we are entering critical trade negotiations with the EU, this would raise a trade barrier to the EU as well as growers in Morocco, Tunisia, Argentina, Turkey, and Greece who are top exporters to the American market.

The Congressional Budget Office (CBO) noted that the Farm Bill’s provision to impose a marketing order on imported olive oil would be quite expensive. Because it would hit the private sector and not use government funding, CBO labeled it a private sector mandate and states “Because 15,000 to 20,000 lots of olive oil are imported annually, the costs of those inspections could amount to tens of millions of dollars per year.” So rather than place at risk thousands of Americans jobs involved in the importation, distribution, and transportation of olive oil who would be impacted, the House voted for free trade. This will keep costs in line with global market demand and supply, encourage California and other growers to become more efficient in meeting the continuing growth in demand for olive oil, and once again stay the hand of regulations that are more nuisance than consumer friendly.

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