Trump’s trade tariffs ‘pose threat’ to CAP payments and young farmers

US President Donald Trump’s much-publicised new import tariffs could have knock-on implications for EU farm food produced under the Common Agricultural Policy (CAP), MEP Mairead McGuinness has warned.

The First Vice-President of the European Parliament today voiced her concerns over the potential impact of the tariffs – which includes a 17% customs duty on Spanish olives.

The Midlands North West MEP, and member of the parliament’s Agriculture Committee, voted in favour of a parliamentary resolution aimed at urging the EU Commission to investigate the issue and “react appropriately”.

In a statement, McGuinness said she is surprised that young farmers and voluntary coupled support is in the sight of the US administration.

“In addition to the widely talked about tariffs on steel and aluminium, President Trump also imposed a customs duty of 17% on Spanish olives.

The US justified this move by claiming certain key aspects of the CAP, such as the Basic Payment Scheme and Aid for Young Farmers, are trade distorting.

“My concern is that this challenge against one European product, Spanish olives, could have implications for all products covered by the CAP – particularly because the support measures in question fully qualify for the criteria of green box payments according to the World Trade Organisation (WTO),” McGuinness said in Strasbourg.

So-called “green box” policies refer to domestic or trade policies that are deemed to be minimally trade-distorting. They tend to be programmes that are not targeted at particular products, and include direct income supports for farmers that are decoupled from current production levels or prices.

‘Diplomatic action needed’

Today’s resolution calls on the commission to “clarify” the situation with regard to WTO rules and anti-dumping margins.

An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.

The commission is also urged to “study the possibility of challenging” the US decision before the WTO dispute settlement body.

It is also being called upon to take “all possible diplomatic action” to defend the non-distorting nature of the EU’s agricultural subsidies.

The US investigation focused on the three main Spanish manufacturers which accounted for 70% of Spanish exports to the US. It is understood that the newly imposed anti-dumping and countervailing duties may affect all exports of ripe olives by Spain – the world’s main producer.

“It is a severe blow to Spain which had seen an increase of 20% in exports to the US since 2013; enabling the creation of thousands of jobs and provided economic relief to areas hardest hit by the economic crisis.

With today’s resolution, we are highlighting the difficulties these measures taken by the US represent for the EU’s Common Agricultural Policy.