When life gives you lemons, make lemonade
19 June 2017
World trade can often turn sour, but when it comes to lemons, sour is probably a good thing. On a particularly sour note for US consumers, the USA is to receive shipments of Argentine lemons for the first time in 16 years following the lifting of a controversial import ban.
For as long as many can remember, Argentine lemons have been subject to quarantine rules due to fears regarding pests being bought into the country that could damage American crops by the fruit. A relaxation of this quarantine was suggested in 2000 but was rejected following a law case involving lemon growers from California and Arizona – the USA’s sole lemon producers.
They argued that the risk of contamination remained and that the FDA was only considering lifting the ban for the political reason of helping Argentina to open its borders in regard to trade – something the courts sided with. Subsequent relations between the USA and Argentina have stalled, in part due to the Argentinians’ high export taxes during what has been an unsettled time for the country economically. The issue with lemons also came up with the WTO in 2012 during bilateral discussions involving multiple foodstuffs.
Better relations between US President Trump and Argentina’s President Macri - who have previously conducted business with each other and have both been elected within the last three years – has helped to cool the situation. Macri’s pro-market mandate has seen agricultural export taxes significantly reduced and a more open relationship with the US has developed.
Trump’s protectionist agenda was at one point seen as a potential stumbling block but a resolution has nonetheless been agreed, meaning the world’s largest lemon consumer will now be able to import the fruit from the world’s fourth-largest producer.
The fact that Argentina has a trade deficit with America – rather than the other way around – is seen by The Economist as a key reason for the turn of events. California’s citrus growers aren’t best pleased by the decision, but as the saying goes, ‘when life gives you lemons, make lemonade’.
Source: The Economist - The Argentine-American lemon war of 2001-2017