International Markets in Flux for Blueberries

In 2016, with the World Trade Agreement in full force, the Trans Pacific Partnership being negotiated and the North American Free Trade Agreement in place, tariffs on agricultural products had ceased to be much of an issue, according to Bill Bryant, chairman of Bryant Christie, an international trade-policy and marketing firm that helps the blueberry industry open new markets.

That is no longer the case. “Now tariffs are in the forefront,” Bryant said in a presentation at the 2020 Oregon Blueberry Conference in February.

“That is because the United States started using tariffs as a leverage to get what it wanted from other countries and this has created uncertainty in the marketplace,” Bryant said.

Bryant brought forward several examples where the current administration’s policies have complicated efforts to reduce tariffs on exported blueberries, including in India and Japan.

“In Japan, our (blueberry) exports have always been steady, until just recently,” he said, a development that started when the U.S. pulled out of the Trans Pacific Partnership after convincing Japan to join the negotiations.

“What that did is it created some ill will (with Japan), and since the other countries that were in the room, including Canada, Australia, New Zealand, Chile and the Asian countries, went forward, Japan lowered the tariffs for those other countries, but not for us.

“So, what we started seeing in 2019 is we were losing our customers to these other countries,” he said.

Since then, he said, the industry has been able to negotiate a side agreement with Japan. “For blueberries, it is a mixed deal,” he said. “We have a nine to eleven percent tariff on dry berries into Japan. It is eliminated on fresh and we still have a tariff on unsweetened and sweetened frozen.”

He added, “There is supposed to be a round two in these negotiations, and if there is, we’ve got to make sure that blueberries are part of it and we get these tariffs down to at least where the Canadians and Chileans are right now.”

A similar development occurred in India, where a U.S. threat of new tariffs on Indian imports derailed progress the blueberry industry was making at eliminating tariffs, Bryant said.

“We were hoping a proposal was coming out this week,” he said at the February conference, “and that we would be able to announce a reduced tariff. But the U.S. started threatening new tariffs on India and India responded by proposing to raise tariffs on a number of products in the U.S.”

Trade negotiations with China also have disrupted efforts to get tariffs reduced on U.S. agricultural exports, he said.

“We’ve got almost 1.5 billion people over there,” he said. “It is a growing middle class and they are interested in high-quality food. The problem is, in 2018 and 2019, our exports to China plummeted.”

U.S. agricultural exports to China hit $26 billion during the high point of the Obama administration, Bryant said. “Last year, that fell to about $9 billion.

“So, we are losing significant sales, and it fell so much that our ag exports around the world went down to the point where by the end of 2019 it looked like the U.S. for the first time in decades, or at least since the start of the century, was going to become a net food importer,” Bryant said. “And that could not be allowed to happen.

“We were losing customers to other countries, and so we had to negotiate a sales agreement and that is what the President did,” Bryant said.

In the ensuing U.S. China trade agreement, blueberries fared well, Bryant said. “The agreement compels the Chinese to negotiate quarantine agreements on nectarines, blueberries, avocados and potatoes. When we get that straightened away, we can get negotiations back on track.”

As for the United States-Mexico-Canada Agreement, which replaced NAFTA, Bryant said it was a wash for blueberries.

“Blueberries went back to where they were before all the tariffs started,” he said. “So, we didn’t move forward, but we got back to where we were before all the trade wars, which is a good place to be.”

Bryant, who worked on NAFTA through the Bush administration and into the Clinton administration, added that NAFTA needed to be updated.

“When we negotiated NAFTA, there was no internet,” Bryant said, “so there were no internet sales, for example. We needed to update the agreement so it included things like biotechnology, the internet and intellectual property protections.”

As for the Indian market, Bryant said he is hopeful issues will eventually be ironed out and the market will be a shining star for blueberries.

“There are stores in the higher-end communities in India, which are ten times nicer than anything I shop in, and they have blueberries already from Morocco, Spain and some from Peru. It is a status symbol. All the Bollywood starts are eating blueberries and there is demand there.

“The problem is we have a 30 percent tariff, while Chile has a 15 percent tariff. What we have been trying to do is at least get what Chile and Peru have, but what we really want to do is get to zero to ten percent,” he said.

Bryant also talked about the recent success the U.S. blueberry industry had in opening the Vietnam market. The market, which opened last spring, “is not a huge market,” he said. “We shipped 260,000 pounds in our first year. But the embassy is totally behind it, the ambassador is behind it, and I think that is a market that will grow.”