US spice industry seeks tariff shield for India

Washington, Oct 7 (SocialNews.XYZ) The US spice industry is seeking continued tariff exemptions for Indian spices and wants the protection made permanent as Washington and New Delhi move towards a trade agreement, arguing that many of the products cannot be grown commercially in the United States.

Donald Pratt, president of the American Spice Trade Association (ASTA), said the industry's priority was to preserve tariff exemptions for agricultural products unavailable domestically but widely used by American consumers and businesses.

“Well, for our industry, it's about the continued exemption, you know, from tariffs, of agriculture that's not grown in this hemisphere and cannot be grown in this hemisphere, but that is beloved by our consumers, you know, and our business partners, worldwide,” Pratt told IANS at an event at India House in Washington.

Pratt said the Indian Embassy and others involved in the negotiations had already undertaken significant advocacy on the issue.

“But also I think as they go to wrap up the next phase of that, we hope that that continues the exemption now that we're seeing and becomes hopefully permanently, you know, enshrined, you know, as an exception to tariffs,” he said.

Pratt's comments put a spotlight on a segment of India-US commerce in which the American industry argues imports are essential because domestic production cannot meet demand.

Addressing the gathering separately, Pratt said India grows more than half of the 109 spices recognised by the International Organization for Standardization and is an essential supplier to the US industry.

The United States is the largest market for Indian spices, importing about $700 million worth last year, according to figures cited by Pratt.

“Here's the reality for our industry. The United States grows only a small fraction of the spices we use. Many spices simply can't be grown here at scale,” he said.

Pratt said the industry had spent considerable effort explaining why spices should be treated differently when tariffs were being considered.

He said there was now greater recognition that many spices are tied to particular climates and growing conditions and cannot simply be replaced with US production.

“So we rely on India for cumin, fennel, chilies, and dozens more spices,” he said. “They season the food Americans enjoy every day.”

Pratt said ASTA had worked closely with the Indian Embassy on tariffs over the past 18 months and described those discussions as “open, practical, collaborative”.

The association also mounted its own campaign to keep spices outside new tariff barriers.

“Asta led the industry advocacy for spices to be exempt from new, tariffs,” Pratt said.

“Our advocacy paid off last year with most spices included on exemption lists for Section 122 as well as 301 tariffs as unavailable natural resources,” he said.

“And as India and the US move towards a final trade agreement, we're hopeful for further considerations that keep spices accessible and affordable.”

The industry's case is built partly around the argument that tariffs on spices unavailable in the United States would raise costs without providing protection to a significant competing domestic industry.

Roberto Fanni, who chairs ASTA's science and regulatory committee, said the association had secured exemptions for spices because the United States was not a major producer.

“However, spices are exempt because it's recognized that US is not a producer of spices, so there is no any national production that can be, I would say pushed if there is a ban or there are tariffs for spices,” he told IANS.

Fanni said the relationship between suppliers in India and the US market was also evolving, with Indian producers increasingly understanding American requirements.

“The spice trace is definitely strategic. It's growing and it's really amazing to see how the relationship between the two countries are getting better,” he said.

He said suppliers and producers in India were addressing food safety and compliance issues from the farm level to make products more readily acceptable in the United States and allow trade volumes to expand.

Laura Schumer, executive director of the American Spice Trade Association, said India occupies a central position in the industry's supply chain.

“India is absolutely our most critical trade partner,” Schumer told IANS.

“Historically, we've relied so heavily on India, both for the breadth of spices, the volume of spices, and the value of spices that we import into the United States. India is our most critical trade partner, bar none.”

Schumer said the association represents about 100 companies that import, process, manufacture and sell spices in the United States. The India House event brought industry members together with government representatives and organisations working across the food and agriculture supply chain.

India and the United States have a broad trade relationship spanning goods and services, with tariffs and market access among the issues that have periodically produced differences between the two sides. Agriculture is particularly sensitive because trade policy can directly affect domestic producers, importers and consumers.

The spice industry's position distinguishes products that can be produced domestically from those that cannot be grown commercially in the United States. ASTA's case is that exempting unavailable natural resources such as many spices allows American businesses to maintain supplies without undermining comparable US agricultural production.

Source: IANS