J As Florida citrus products struggle in the U.S.
market, notably declining orange juice sales, international trade opportunities
have opened up in Asia and Europe.
South Korea has become a growing market for Florida orange juice, said Matt McGrath, as Washington, D.C.-based trade lawyer, and new OJ opportunities could open up along the Pacific Rim, including Japan, and with the European Union as the U.S. works on free trade deals in those areas.
McGrath, of the law firm Barnes, Richardson & Colburn, represents Florida Citrus Mutual in Lakeland, the state's largest growers' group, on international trade issues. He spoke at the Citrus Mutual board of directors 65th Annual Meeting Wednesday as part of the Florida Citrus Industry Annual Conference in Bonita Springs.
As a result of the South Korean free trade agreement that became effective last year, Florida OJ imports there have grown to almost 7 million gallons in the first three months this year, equal to total OJ imports last year, McGrath said. OJ imports could finish the year near 30 million gallons.
Standing in the way of that growth, however, is a recent Korean crackdown on OJ imports over country-of-origin issues, he added. South Korean customs authorities have raised questions whether those OJ shipments contain entirely Florida product.
Three of the four companies that ship bulk OJ there are subsidiaries of Brazilian companies, McGrath said. They are Cutrale Citrus Juices U.S.A. Inc. in Auburndale, Citrosuco North America Inc. in Lake Wales and Winter Garden-based Louis Dreyfus Citrus Inc.
Under the South Korean free trade agreement, U.S. OJ products pay no tariff while other countries, including Brazil, pay a 54 percent tariff, McGrath said.
The U.S. Department of Agriculture certifies the OJ comes from Florida, he said, but Korean customs officials have been asking for additional proof. McGrath and USDA officials are negotiating with Korean officials to resolve the problem.
"Korea's a promising market, and the benefits will be realized by growers and processors," said Andy Taylor, chief financial officer with Peace River Citrus Products Inc. of Vero Beach, the fourth major exporter to Korea.
Peace River runs a processing plant in Bartow.
Meanwhile, McGrath said, Florida Citrus is playing defense against retaliatory tariffs threatened by Canada, the biggest market for Florida OJ products outside the U.S.
The Canadian government has threatened to impose the tariffs on dozens of U.S. agriculture products because it claims a U.S. law requiring country-of-origin labeling violates international trade rules, he said.
If Canada imposes the tariffs, it won't likely happen for at least another year, McGrath said. Meanwhile McGrath is working with officials at USDA and the U.S. Trade Representative's Office to resolve the dispute.
Japan recently joined the list of nations negotiation with the U.S. on a free trade deal called the Trade Partnership of the Pacific, he said.
Japan imposes a 25 percent tariff on orange and grapefruit juices, McGrath said, and elimination of that tariff could create a new market for Florida. Japan is already the world's top foreign buyer of Florida grapefruit.
The European Union recently agreed to begin negotiations on a comprehensive free trade pact with the U.S. that would open up trade between the world's two largest economies, he said.
Elimination of European OJ tariffs would give Florida citrus a competitive advantage over Brazil, its rival in the global OJ market that currently supplies the continent with most of its orange juice, McGrath said.
Obama administration officials said they hope to conclude an EU trade agreement this year, he said, but that's probably wildly optimistic.
"Personally I think a U.S.-EU trade agreement will have a whole lot of issues that make an agreement likely to take a long time," McGrath said.
High on the list of contentious issues is the EU's requirement that any product containing ingredients from genetically modified organisms (GMOs) state so on the label.
Monsanto and other U.S. companies are major producers of GMO products, and they've successfully defeated state and local efforts to require GMO labeling.
(c)2013 The Ledger (Lakeland, Fla.)
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