The Italian government is considering using EU funds to compensate food producers hit by US tariffs as the industry awaits by next month the completion of a US review of the punitive measures, Foreign undersecretary Ivan Scalfarotto said.
Scalfarotto met with US officials in Washington DC at a critical time for the food industry targeted by the retaliatory measures imposed by the Trump administration last October as part of a long-time WTO dispute with the EU related to subsidies for plane manufacturers Airbus and Boeing.
“Our goal was to be here at an extremely delicate moment because of the review of the WTO tariffs,” Scalfarotto told media at the Embassy of Italy in Washington DC before leaving for Canada on Wednesday.
Italian food manufacturers, as well as US distributors, met by Italianfood.net at the recent Winter Fancy Food Show in San Francisco expressed concerns that the US review may lead to a further squeeze of top-selling Italian food products such as cheese, wine, prosciutto, and olive oil.
US WANTS TO GO AHEAD WITH TARIFFS – FOR NOW
Recent top-level talks between US President Donald Trump and the WTO and the European Commission chiefs during the World Economic Forum in Davos, Switzerland raised hopes for a possible EU-US trade agreement ahead of the US presidential election in November. However, the road is still uphill.
“Despite the more relaxed atmosphere that we found after the meetings held in Davos, the US administration is firmly convinced to go ahead with the WTO tariffs,” Scalfarotto said.
Ahead of a new ruling in the dispute expected in May, this time over Boeing subsidies, the US administration does not seem intentioned to ease pressure on the EU. In fact, the WTO has allowed the US to apply tariffs for a total of 7.5 billion dollars. The first round of tariffs affected only around 2 billion dollars of imported EU goods, of which 468 million dollars in Italy.
FORMS OF EU COMPENSATION FOR TARIFF-HIT PRODUCTS
While transatlantic discussions continue, Italy has moved in support of food producers. The Italian Trade Agency has activated a 10-million-euro plan to promote tariff-hit products in the United States throughout 2020.
“One other thing that we can do, and this is something that Agriculture minister (Teresa) Bellanova is doing, is to work with the European Union on forms of compensation, to mitigate the impact considering that we have been hit because of our EU membership,” the undersecretary said.
Italy insists that it is not part of the Airbus consortium (France, Germany, UK and Spain). However, the US says Italy is still part of the EU and should make pressure on the consortium countries to remove the subsidies and compensate the US.
Scalfarotto, who also met with deputy US Trade Representative Jeffrey Gerrish and Assistant Commerce Secretary Jeffrey Kessler in Washington, said that there is “no guarantee” that Italy will be spared but asked the US administration to take a “balanced” decision.
THE AMERICAN ITALIAN FOOD COALITION BACKS ITALY
American distributors have also voiced concerns over an economic impact on US consumers. The Federal Reserve estimated that every US household will pay 414 dollars per year because of the higher tariffs (producers and retailers have increased prices to partly offset the higher import costs).
The American Italian Food Coalition, an alliance of more than 450 Italian companies and trade associations, urged the Trump administration “against punishing certain Italian products with tariffs.”
“Italian food products like pasta, coffee, and wafers ‘are uniquely Italian in nature and are not in any way related to the ongoing subsidy dispute regarding the Airbus consortium countries, to which Italy is not a party,” the AIFC said.
Scalfarotto also met with AIFC Chairman Lou Barletta, a former Republican Congressman, during his official visit.