The “Report on Seasonal and Perishable Products in U.S. Commerce” was released yesterday, and it packs a wallop.
Authored by the Office of the U.S. Trade Representative, the U.S. Department of Commerce and the U.S. Department of Agriculture, the report outlines actions that it says will support American producers of seasonal and perishable fruits and vegetables.
The report was jointly issued by the agencies to address threats that increased imports posed to American producers of seasonal and perishable fruits and vegetables. The report also refers to a previous hearing on the issue.
Notably, the report says the USTR will request the International Trade Commission to initiate a Section 201 global safeguard investigation into the extent to which increased imports of blueberries have caused serious injury to domestic blueberry growers. In addition, USTR will pursue senior level government discussions with Mexico over the next 90 days to address U.S. industry concerns regarding U.S. imports of Mexican strawberries, bell peppers and other seasonal and perishable products.
USTR, the report said, will work with domestic producers and to commence an investigation by the International Trade Commission to monitor investigate imports of strawberries and bell peppers, which could enable an expedited section 201 global safeguard investigation later this year.
Meanwhile, the Department of Commerce committed to establish an outreach program to connect with Southeastern U.S. and other domestic growers of seasonal and perishable fruits and vegetables to enhance understanding of applicable trade remedies and processes.
The Department of Commerce will establish a formal channel for stakeholders to provide information related to unfair subsidies for foreign producers and exporters of seasonal and perishable fruits and vegetables, including those in Mexico, building on effort efforts to partner with the U.S. industry to identify such subsidies.
For its role, the Department of Agriculture will increase its targeted outreach to producers of seasonal fruits and vegetables to maximize use of existing Department of Agriculture programs and develop a market promotion strategy for domestic produce. The USDA also will initiate conversations with relevant federal partners to better understand the extent to which imports of seasonal and perishable products are utilized to enable criminal activity.
Finally USTR, the Department of Commerce and USDA will establish an interagency working group to monitor seasonal and perishable fruit and vegetable products, coordinate regarding future investigations and trade actions and provide technical assistance to members of Congress developing legislation on this issue.
Together, those represent are a lot of potential action items by the government. One that struck me was USDA’s charge to develop a market promotion strategy for U.S. produce. Would the government fund that effort? How would industry groups, including United Fresh, the Produce for Better Health Foundation and the Produce Marketing Association, respond to the idea of a domestic only fresh produce promotion campaign?
Another element that caught my eye was the USDA conversation with federal partners to better understand the extent to which imports of seasonal perishable products are utilized to enable criminal activity. For example, one could assume they will examine if there is any link between the movement of produce into the U.S. and the distribution of drugs in the U.S.
The real “meat” of the report, though, is the reference to the Section 201 global Safeguard Investigation into the extent to which imports of Mexican produce have caused injury to domestic growers.
The report said the USTR will request the International Trade Commission immediately commence a Section 201 investigation for blueberries. This will mark the first time in nearly 20 years that USTR has used this authority, according to the report.
As the report explains, Section 201 is an important part of the administration’s trade toolbox.
It calls for the ITC, upon receipt of a petition from domestic producers, or a request from the administration, to investigate whether increased imports of a product are causing are threatening to cause serious injury to the domestic producers of the product.
If the ITC determines that injury occurred or will occur, the president is authorized to take all action within his power to facilitate efforts by the domestic industry to “make a positive adjustment” to import competition, including increased tariffs and quantitative limitations.
As the report says, safeguard measures like the remedies available under Section 201, are explicitly allowed under World Trade Organization rules when necessary to prevent or remedy a serious injury caused by increased imports into the U.S.
In 2018, the president used his authority under Section 201 to increase tariffs on imported washing machines and solar panels. In both cases, the report said, the import restrictions prompted a marked improvement of the domestic industry.
Two main aspects of section two one distinguish this remedy from U.S. anti-dumping and countervailing duty laws, according to the report. First of all, Section 201 does not require a finding of unfair trade practices, but rather an increase in imports, irrespective of the reason for the imports, is by itself sufficient to warrant a trade remedy, provided the increases a substantial cause of serious injury or the threat to the domestic industry producing an article like or directly competitive with the imported articles.
Secondly, Section 201 investigations are not restricted to assessing imports from one particular country. The investigations analyze and account for impact of imports into the U.S. from all countries.
In the case of blueberries, the focus would not be on Mexico only, but also Chile and Peru and perhaps other countries.
Section 201 investigations ordinarily begin after the filing of a petition with the ITC by the entity that is representative of the domestic industry producing the product in question.
However, the report says the statute also requires the ITC to convict conduct an investigation if requested by the president or the U.S. Trade Representative. Despite this authority, USTR-requested section 201 investigations have been exceptionally infrequent and USTR has only requested one section investigation in the last 25 years.
The report said USTR has decided to utilize this seldom-used authority to request the beginning of a Section 201 global safeguard investigation into blueberries. The law calls on ITC to complete its investigation and determination within 120 days, according to the report. If the investigation is affirmative, the ITC is required to complete all its deliberations and provide a report containing his findings and recommendations to the president no later than 180 days after it began its investigation. After that, the president has 60 days to decide what actions to take.
Here is a poll posted on the LinkedIn Fresh Produce Industry Discussion group: "Considering economic harm to U.S. growers, what should be done about increasing imports of blueberries?"
- Nothing .. market is working
- Tariffs or quotas selectively
- Subsidies to U.S. growers
- Promotions effort USA grown
So far, there have been about 40 votes and the leading vote-getter is "Promotions effort USA grown"