411.656/11–2451
The Italian Embassy to the Department of State 1
No. 12682
The Italian Embassy presents its compliments to the Department of State and has the honor to bring the following to its attention.
[Page 1457]The Embassy has been informed that the California Oil Association made representations to the United States Department of Agriculture requesting the adoption of quantity restrictions on imports of olive oil, under the provisions of Section 104 of the Defense Production Act, as amended.
It has also come to the Embassy’s knowledge that the California Oil Association intends to invoke the “escape” and “peril” clauses for an increase of the tariff protection, which would curtail the imports of olive oil from abroad.
Since olive oil is one of the most important and traditional among the Italian imports to the United States, the Embassy deems it necessary to call the attention of the Department of State on the serious consequences which would derive to the Italian economy and to Italian-American trade if restrictive measures were adopted also in regard to this most typical Italian product.
In this respect the Italian Embassy wishes to point out the following circumstances:
1) Italy has already a trade unbalance of several hundred million dollars as a consequence of the persistent excess of American exports over imports of Italian goods. Any measure tending to increase this unbalance would be in contrast to the strenuous efforts made toward the restoration of a freer flow of trade, more than ever essential at this time to the economic stability and strength of democratic nations.
2) Olive oil constitutes one of the few Italian agricultural sources of foreign exchange earnings. Continuous export of this product is essential to Italy in order to obtain less expensive vegetable oils needed for her domestic consumption. The dollars Italy acquires from the exports of olive oil are entirely spent in the purchase of soy beans, soy oil and other oil seeds in the United States, which is a traditional source used by Italy in procuring supplies of these products in the substantial quantities required.
3) Italian olive oil, refined and packed in Italy, has earned through many years a position of well deserved prestige with American consumers. A large market for olive oil has thus been built in the United States for olive oil of high quality. Imports of Italian olive oil in this country have, therefore, in no way endangered, rather, they have favored domestic production by stimulating a taste for it, to the advantage of the producers of California. It is to be noted that American production of olive oil has not diminished, but has remained almost stationary in the last fifty years, due to natural limitations of soil and climate.
As to the application of Section 104 of the Defense Production Act, the Italian Embassy feels that the same observations and reservations hold which were already formulated by its Note Verbale No. 92052 [Page 1458] regarding the importation of cheese and deems it necessary to point out that also from a juridical point of view, none of the conditions contemplated by Section 104 for the control of imports subsists in the case of olive oil. In fact:
- a)
- imports of olive oil have not reduced domestic production;
- b)
- they do not interfere with the orderly domestic storing and. marketing of any such commodity or product, and
- c)
- they do not result in any unnecessary burden or expenditure under any government price-support program, since—as far as olive oil is concerned—no controls, marketing regulations or price-support programs have been enacted by the United States Government.
The Italian Embassy is sending herewith enclosed an informal Memorandum3 about Italian olive oil production and exports, illustrating also the considerable imports into Italy, yearly, of agricultural products from the United States.
In regard to a possible increase of duty on olive oil obtained by having recourse to the “escape clause” mentioned above, the Italian Embassy wishes to call the attention of the State Department to the fact that none of the circumstances contemplated in Article XIX of GATT exist in this case and that any increase of duty on imports of olive oil will be considered as a violation of the recent multilateral tariff agreements signed at Geneva, Annecy and Torquay.
The Italian Embassy has the honor to request that the foregoing be kindly brought by the Department of State to the knowledge of the competent United States Authorities and thanks in advance for its cooperation in the matter.