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Pear producers brace for increased tariffs from Brazil

by Joan Murphy | March 16, 2010
WASHINGTON -- If Brazil joins Mexico in levying retaliatory trade tariffs on U.S. pear producers, it would cut 50 percent of total exports, according to Jeff Corea, international marketing director for the Pear Bureau Northwest.

Brazil announced March 8 that it would raise tariffs on $591 million worth of U.S. products in retaliation for U.S. cotton subsidies. The World Trade Organization found that U.S. cotton subsidies were discriminatory and authorized Brazil to enact countermeasures against U.S. goods. The 102 U.S. products on the hit-list include hazelnuts, walnuts, pears, cherries and plums.

While U.S. and Brazil trade representatives have until early April to find a solution before the new tariffs are on the books, pear producers will need to prepare for tariffs to jump to 30 percent from 10 percent.

"It won't kill the market for us. It will impact volume and put downward pressure on pricing," said Mr. Corea.

The Northwest region begins shipping pears in late August and early September, and the pear bureau estimates that it exports 560,000 boxes each year to Brazil.

But the cumulative effect is jarring, especially since the industry is already absorbing $20 million in lost sales and price reductions since last March when its top export market, Mexico, waged a costly trade dispute with Congress over a stalled trucking program.

In the meantime, Mr. Corea is reaching out to Congress for relief, forming a coalition with other commodities on the firing line and telling importers in Brazil to petition their government about the financial impact the tariff increases would have on businesses.

"We are disappointed to learn that Brazil's authorities have decided to proceed with countermeasures against U.S. trade in the WTO cotton dispute," U.S. Trade Representative spokeswoman Nefeterius McPherson said in a press statement earlier this month. "USTR is working to reach a solution to the issues in this dispute without Brazil resorting to countermeasures, and we continue to prefer a negotiated solution."