Trade war could raise price of Roquefort by hefty chunk

McClatchy NewspapersApril 8, 2009 

US NEWS FOODFIGHT 2 MCT

Roquefort cheese is at the center of a long-running battle between the U.S. and the E.U. over the EU's refusal to import hormone-treated U.S. beef.

GEORGE BRIDGES / MCT

WASHINGTON — Roquefort cheese and some other popular European food imports could disappear soon from U.S. gourmet shops and fancy food departments.

The imports, which also include selected processed meats from Italy and jams from France, are hostages in a long-running trans-Atlantic food fight over the European Union's French-led refusal to import hormone-treated U.S. beef.

By the tit-for-tat logic of playgrounds and trade disputes, if the European Union doesn't lift its 20-year beef ban, the United States gets to impose punishing tariffs on selected products that EU members want to sell here. The World Trade Organization ruled that the ban had no scientific basis and in 1999 authorized retaliatory U.S. tariffs until the EU relents.

The first round of tariffs didn't make the EU budge, so the Bush administration's U.S. trade representative, Susan Schwab, announced a second round as she left office in January.

No one's likely to starve as a result, but the pending 300 percent duty on Roquefort, which could be imposed as soon as April 23, would drive its price into the unheard-of range of $60 a pound.

"I couldn't afford it," said Jennifer Fennell, 40, of Washington, an aghast fan. The salty, creamy, crumbly blue that smells a bit like the sheep with whose milk it begins now costs about $20 a pound.

At $60, Roquefort "will die a slow death over maybe four months" as stockpiles sell out, predicted Dominique Delugeau, the vice president for sales and marketing at DCI Cheese Co., in Richfield, Wis.

That's just what the trade representative intended, and it's music to the ears of France-bashers, competing U.S. cheese-makers and even Roquefort's French rivals for U.S. sales

While Roquefort is the most harshly attacked, other, 100 percent U.S. tariffs probably would double the retail prices of bottled water from Italy, chestnuts from France and foie gras, truffles, beef sausage, bone-in hams, canned peaches and filled chocolates from 26 EU member countries, France prominent among them.

"We tried to make sure countries most hostile to settlement and anti-trade understood that it had consequences," Schwab explained. Accordingly, Britain, usually an ally in trade talks, was spared.

While pounding longtime intransigents such as France, the new list also taxes more products from more countries, including peripheral ones such as Bulgaria, Poland, Slovenia and Cyprus.

If EU members won't start buying U.S. beef, their best hope is that Obama administration trade negotiators merely threaten their European counterparts with punishing new U.S. tariffs and don't impose them. Incoming U.S. Trade Representative Ron Kirk signaled that possibility by deferring the new tariffs' effective date, originally set for March 23, for a month.

To add leverage, the new tariff scheme draws powerful international companies such as Swiss-based Nestle into the fray. Nestle, which has influence in agriculture ministries throughout Europe, owns an Italian bottled water popular with U.S. consumers — San Pellegrino — that the tariff would make prohibitively expensive.

Why bash Roquefort rather than French brie, however? Why go after French sheep farmers to avenge French intransigence on U.S. beef imports? Why go after U.S. consumers such as Fennell with a fusillade of minor trade interventions that mix punishment and protectionism?

The rough logic was that the tariffs had to get the attention of as many EU governments as possible without harming U.S. businesses, Schwab said. In practice, spreading the pain while making it acute meant going after iconic niche products such as Roquefort, whose U.S. market totaled just $2.7 million last year, according to U.S. Agriculture Department figures.

A closer look at how the former trade representative and her staff picked some targets and dropped others suggests that the late Sen. Russell Long, D-La., got it right when he said that in levying taxes, the principle tends to be "Don't tax you. Don't tax me. Tax that man behind the tree."

Between Nov. 6, when Schwab identified tentative candidates, and Jan. 13, when she made her picks, more than 700 parties weighed in. All wanted someone else to be taxed. For example:

_ The National Milk Producers Federation, whose cooperatives produce most of the U.S. milk supply, wanted imported Gouda, Emmenthal and cheddar as well as Roquefort to be hit. It failed.

_ Rep. Wally Herger, R-Calif., whose northern California district includes sprawling orchards of cling peaches that usually are canned, backed the proposed tariff on canned European peaches. They're targeted.

_ Harley-Davidson Motorcycles, saying that it feared retaliation against Harleys imported to Europe, urged that a proposed new tariff on smaller imported motorcycles be dropped. So did scores of motorcyclists, clubs and dealers. It was dropped.

_ Procter & Gamble and Johnson & Johnson, which use European rayon in their tampons, asked that a tariff not be imposed on it. European rayon escaped listing.

_ The Independent Bakers Association wanted oats to be spared. They weren't.

Hit with a 100 percent U.S. tariff in the 1999 round, Roquefort fought back. France's Roquefort Confederation, the main producer group, chipped in to help cheese-makers who exported to the United States. Importers ate some of the tariff's added costs. Consumers to this day also pay a bit more for Roquefort's pleasures.

The 100 percent tariff on Roquefort, Schwab concluded, "wasn't having the desired persuasive effect."

So what did the mere threat of a 300 percent Roquefort tariff do? It boosted Roquefort sales immediately, said Carlos Estrada, who runs the cheese department at Calvert Woodley, a leading Washington wine and cheese shop.

It also led many retailers to hoard Roquefort, said Jack Fromberg, the president of The Great Cheese Corp. of Baltimore, a regional wholesaler.

It relieved some price pressure on the Old Chatham Sheepherding Co., in Old Chatham, N.Y., which makes a competitor to Roquefort called Ewe's Blue.

"Roquefort comes into the country costing less than we can produce it for," sales manager Shaleena Bridgham said. "People need to buy American or we're never going to grow as a country again."

In the French Pyrenees, Roquefort's home, cheese-makers have reacted by promoting the export of a taste-alike called Bleu des Basques Brebis. Though it comes from the same region as Roquefort, it would evade the tariff and sell for around $20 a pound in the United States.

"A lot of people wouldn't notice the difference," predicted Ihsan Gurdal, the owner of Formaggio Kitchen, a temple to cheese in Cambridge, Mass.

ON THE WEB

For a list of duty-targeted food imports, go to the Office of the U.S. Trade Representative , click on "Hormones Delay Annex" and scroll down

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