11.05.14

SCHUMER LAUNCHES CAMPAIGN TO GET U.S. TRADE REP TO OPEN FOREIGN MARKETS TO MORE NEW YORK GRAPE JUICE – GLUT OF GRAPES COULD BE EXPORTED TO ISRAEL, BUT MANY ARE GOING TO WASTE DUE TO BURDENSOME TARIFF; OPENING ISRAELI MARKET WOULD BE A BOON FOR WNY, S. TIER & FINGER LAKES GRAPE GROWERS

Grape Juice Is A Staple On The Dinner Table In Israel & Upstate NY Companies Want to Export More; If Tariff Is Reduced, These Exporters Could Buy More Grapes From Western New York, Southern Tier & Finger Lakes Grape Growers – Buying from Upstate Growers Would Help Alleviate Surplus Grape Supply

Schumer Urges Fed Trade Rep, Who Is Currently Negotiating A Trade Agreement With Israel, To Prioritize Lowering or Eliminating the Grape Juice Tariff That Is Holding Back Upstate Grape Growers – Schumer Says U.S. Does Not Impose Same Tariff on Israeli Grape Juice & This Tariff Has Been Successfully Lowered In Previous Negotiations


Schumer: Lower Israel Grape Juice Tariff Means More Demand for Grapes & Increased Competitiveness For WNY, S. Tier And Finger Lakes Growers

Today, U.S. Senator Charles E. Schumer pushed to lower Israel’s tariff on U.S. grape juice that, if reduced or lifted, could enable Western New York, Southern Tier and Finger Lakes growers to sell more grapes. Schumer explained that Israel currently imposes a 22% tariff on any company looking to export more than 100,000 liters of grape juice into the country. Schumer said that this prevents grape juice companies from exporting more juice to Israel – a country where grape juice is a major staple in the diet – and therefore from buying more grapes from places like Clearview Farms in Branchport and Pleasant Valley Wine Company in Steuben County. Schumer urged the U.S. Trade Representative (USTR) and U.S. Department of Agriculture, who are currently in the midst of trade negotiations with Israel, to prioritize lowering or eliminating this tariff, which has already been successfully lowered during previous trade negotiations. Schumer said that any improvements to the tariff would be a boon to local Upstate New York grape growers because it would further open up Israel’s market and help stabilize prices.

“Grape juice is a staple at Israeli dinner tables and opening up Israel’s market, and any other foreign market, to more American grape juice exports would be a tremendous boon to Upstate New York grape growers. This unfair trade tariff is standing in the way, however, and I am urging the U.S. Trade Representative, who is currently in the midst of trade negotiations with Israel, to lower or eliminate this tariff,” said Schumer. “The current glut of grapes should not go to waste, and lowering this tariff would be a great way to ensure more of these grapes hit the market and prices stay where they should be. There is a tremendous thirst for grape juice in Israel, and we need our trade representatives to knock down the barriers that are standing in our way. Israel has more generous grape juice trade agreements with other countries, and they should give American grape juice and Western New York, Southern Tier and Finger Lakes region grape growers the same treatment.”

Currently, Israel imposes a 22 percent tax on all grape juice exported from the U.S. to Israel in excess of 100,000 liters. This tariff has prevented American-made grape juice from effectively competing in Israel, and has cut down on potential exports. Schumer said that Israel should be a prime destination for U.S. grape juice due to the fact that there are over one million Americans living in the county and because grape juice plays such an important role in the local culture, diet and religion. Unfortunately, however, this tariff is preventing U.S. grape juice from reaching its full market share potential, and therefore hurting Concord grape growers in Upstate New York – specifically in Western New York, Southern Tier and Finger Lakes regions – who would benefit from a lower tariff and increased exports. Schumer cited one company, Kedem, that exports 1.8 million liters of kosher grape juice to Israel per year, and is looking to export more, but this tariff is holding them back. Schumer said Kedem buys grapes from farms in Yates, Cattaraugus, Schuyler and Chautauqua counties, and could buy more if this tariff and quota are lifted or reduced.

Schumer said that not only is this low 100,000-liter quota unfair and the tariff too high, it is not on par with tariffs on grape juice exports to Israel from other countries. For example, Schumer noted, grape juice exports from the European Union into Israel are taxed after 230,000 liters, allowing companies in Europe to export 130,000 more liters into Israel than a U.S. company before being taxed. In addition, Schumer said, the United States does not impose any quota on Israeli grape juice exports into the United States.

Schumer said that this quota and tariff has real consequences for Upstate New York grape growers. Schumer said that, currently, there is a glut of grapes and grape juice, which means that growers will struggle to make a profit due to the oversupply of juice on the market now. Increased exports to meet demand in the Israeli market would benefit Western New York, Southern Tier and Finger Lakes growers by helping to limit oversupply and allowing for additional expansion and investment.

The U.S. Trade Representative (USTR) and U.S. Department of Agriculture (USDA) are currently undergoing trade negotiations with Israel, and Schumer said the grape juice tariff is one of the items being discussed. Schumer urged the USTR to make re-negotiating the grape juice tariff a priority and do everything he can to get Israel to open its market up even further for Concord grape juice. Schumer argued that there is precedent for lowering this tariff, noting that during previous trade negotiations, the USTR was able to drop the tariff from 120 percent to the current 22 percent.

Schumer noted that the following Upstate New York counties grow grapes: Cayuga, Chautauqua, Chemung, Chenango, Clinton, Columbia, Delaware, Dutchess, Erie, Essex, Franklin, Genesee, Greene, Herkimer, Jefferson, Lewis, Livingston, Madison, Monroe, Montgomery, Niagara, Oneida, Onondaga, Ontario, Orange, Orleans, Oswego, Otsego, Rensselaer, Rockland, St. Lawrence, Saratoga, Schuyler, Seneca, Steuben, Sullivan, Tompkins, Ulster, Washington, Wayne, Westchester, Wyoming, and Yates.

A copy of Senator Schumer’s letter to the USDA and USTR appear below:

Dear Ambassador Froman and Secretary Vilsack:

I commend your efforts to achieve a comprehensive and ambitious agreement in extension of the U.S.-Israel Agreement Concerning Certain Aspects of Trade in Agricultural Products (ATAP) and I write to urge the USTR to prioritize the elimination of Israel’s grape juice tariff in the ongoing negotiation.

As you know, the U.S. has eliminated its tariff on grape juice from Israel and faces a competitive disadvantage to the European Union’s (EU) producers in Israel’s market as a result of the preferential quota treatment EU currently receives. While the reduction in the tariff on U.S. grape juice in 2004, from 120 percent to effectively 22 percent, was a step in the right direction and has resulted in an increase of U.S. grape juice exports to Israel from $200,000 to $2 million over six years, more work must be done to ensure U.S. producers have the opportunity to compete in this high-demand market.  New York grape juice producers estimate that grape juice exports to Israel could double if Israel’s tariff is eliminated.

Israel offers a niche Kosher grape juice market that New York grape juice producers are uniquely suited to supply. The U.S. exported over 1.8 million liters, $2 million worth, of grape juice to Israel in 2013 alone. Concord grapes, grown predominantly in New York State, are used to produce Kosher grape juice. In addition, there is currently a saturation of the U.S. grape juice market, which has depressed Concord grape prices for growers in my state.  Lowered trade barriers to Israel’s grape juice market would benefit these growers by increasing grape juice exports to Israel, a market where prices are increasing as a result of unmet demand.

Thank you for your attention to this important issue.  I appreciate the good efforts of USTR over the years to expand our trade relationship with Israel, one of our strongest export markets, and I urge you to work toward a permanent agreement of the U.S.-Israel ATAP that improves market access for U.S. grape juice into Israel through tariff elimination.

Sincerely,

Charles E. Schumer

United States Senator

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