04 Sep

Mexican Duties on EU Olive Oil Are Illegal, WTO Rules

By Jennifer M. Freedman,

Mexican import duties on olive oil from Italy, Spain and Greece are illegal, World Trade Organization judges ruled, backing a complaint by the European Union while rejecting the bloc’s call for a repeal of the taxes.

“Having found that Mexico has acted inconsistently with provisions” of WTO rules on subsidies and import duties, “we recommend that Mexico bring its measures into conformity,” judges said in a 110-page report posted today on the Geneva- based WTO’s Web site.

The EU, which produces four fifths of the world’s olive oil, said when asking judges to rule on the case in December 2006 that Mexican duties as high as 30 percent were imposed in August 2005 without any evidence of a threat to the domestic industry. Mexico imported 8,000 metric tons of olive oil worth $21 million annually from the EU when the complaint was lodged.

The Mexican government said the measures, imposed in August 2005, complied with WTO rules and were necessary because of European olive oil subsidies.

Judges ruled against Mexico on several points, including exceeding the time limit on its investigation and the country’s failure to base the probe on evidence that would allow an objective examination of the data.

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