The American organization National Potato Council (NPC) is calling on the federal government in the United States to tax frozen chips from the Netherlands and Belgium with an import levy of 100%. According to the NPC, companies in their own country are disadvantaged because product from the EU is sold at dumped prices.
The potato organization has sent a letter to the federal government to address their point. That reports Spudman website. According to the NPC, this mainly concerns fries from the Netherlands and Belgium, which account for 90% of all EU fries. According to US figures, imports of frozen fries increased by 500% in volume over a period between 2015 and 2019. The value increased from $12,2 million to $101,2 million. Good for 600%.
Corona makes fries cheaper
The organization fears that both countries will sell an even greater amount of potato products in the US in the near future. As a result of the corona crisis, product prices have fallen, which makes fries from the EU even more attractive. This has ensured that significantly more fries were shipped by Europeans to the US in the first 4 months of 2020, says NPC consultant Matt Lantz. According to the NPC, American companies do not have similar options to export fries to Europe.
French fries from the EU are currently subject to an import tax of 8%. If it is up to the NPC, this will immediately be increased by 100%. The Office of the US Trade Representative (USTR) has this authority, thanks to a change in law introduced in late June against goods imported from the EU. The Americans believe that potato growers in Belgium and the Netherlands enjoy (financial) advantages that allow them to grow potatoes very cheaply. Something that growers in the US do not have. Unfair competition, according to the NPC.
Exports are increasing
Export figures for fries to North America are indeed significant increase see this year. The most recent figures (up to and including May) amount to a plus of 60% over a 12-month period, compared to the same period before. In May, exports to the continent even increased by 85%. This has a lot to do with the price. Until about 10 years ago, American fries were cheaper per ton. However, the price rose year on year, while that of the Netherlands and Belgium moved with the whims of the market and actually fell. Last year, the average sales price of Belgian fries was $800 per ton, that of the Netherlands $950 and that of the US almost $1.200. In 'cheap' potato years this difference is even greater.
Only since 2016 has a structural increase in exports to the US been noticeable. This increased sharply in 2018 and 2019. It went from 20.000 tons of end product to almost 100.000 tons last year. In 5 years, exports increased by 450%.
Not the first
The US is not the first country where the Netherlands and Belgium are accused of unfair competition in the chip trade. Came recently New Zealand en Australia in the news with similar allegations. Well-known trade conflicts in this area are the anti-dumping complaints from Brazil and South Africa. This is disappointing for the European French fries sector. They believe that there is a political game and incorrect facts.