ECUADORIAN BROCCOLI IMPORTS UNDER GSP Ecuadorian Broccoli Imports Benefit the American Economy Ecuadorian producers supply high quality broccoli at a competitive price, throughout the entire year, for the American companies who use it as an input in production. The U.S. imported a total of $435.1 million in broccoli during 2011, an increase of 24.5% in comparison to the amount imported in 2009.1 Ecuador is the fifth broccoli supplier, supplying 4.2% of U.S. imports. Mexico and Canada supply 75.9% of U.S. imports.2 Mexico, Canada, and Guatemala have a free trade agreement with the U.S. Most domestic production is sold fresh, satisfying American consumers’ demand. Ecuadorian imports have no negative impact on the national economy.3 Frozen broccoli serves as an input for other American catering and precooked foods industries. 50% of the broccoli-processing companies in Ecuador are American-owned or hold American investments.4 Ecuadorian broccoli production imports inputs such as seeds and machinery from American companies. Between 1998 and 2003, Ecuador imported 13.5 metric tons of American seeds.5 The main ports of entry for frozen broccoli are Laredo, TX; New York, NY; and Nogales, AZ.6 The Broccoli Sector Cannot Compete Without Trade Preference Programs The Ecuadorian broccoli-exporting industry is young and continues to depend on the Andean Trade Preferences Act (ATPA), set to expire in July 2013.7 36% of the broccoli exported by Ecuador goes to the U.S. market.8 According to the broccoli sector, a tariff duty of 14.9% will cause U.S. imports to decrease by an annual rate of 24.7%, causing a reduction of 7.9% in the broccoli industry employment per year. The U.S. imported $18.44 million in Ecuadorian broccoli in 2011 (4.2% of its total broccoli imports). The exports of broccoli to the U.S. decreased by 18.5% between 2009 and 2011,9 mainly due to the speculation caused by the short-term extensions of the ATPA tariff preferences. 10 Ecuadorian broccoli exporters still need the support provided by the tariff benefits to remain in competitive in the U.S. market, since its major competitors – Mexico and Guatemala – benefit from free trade agreements with the US.11 Frozen Broccoli Exports Support Social Development in Ecuador Accepting this petition will not harm least developed GSP beneficiary countries. Bangladesh, responsible for only 0.0004% of the American market, Sierra Leone with 0.04%, and Togo with 0.53%, are the only least developed countries that supply the product. In 2011, the Ecuadorian industry generated 3,361 direct jobs and 9,700 indirect jobs in Ecuador. The employment generated by the broccoli industry has increased by 3.2% in the last three years.12 Broccoli production is labor intensive and employs low skill labor, an important social benefit.13 Approximately 96.9% of workers in the industry live in rural areas; 14 49.9% of workers in 2011 were women. Broccoli is produced in Pichincha (43.8%), Cotopaxi (43.5%), Chimborazo (5.9%), Azuay (2.5%), and other provinces (4.29%), some of the poorest provinces of the country with a high incidence of drug-trafficking.15 The region has low drug production because of industries such as the frozen broccoli export industry.
Production per Province and % of population with Unsatisfied Basic Needs (UBN) Province % of Poverty Extreme national (UBN) poverty Incidence of drug production16 broccoli (UBN) production Pichincha 43.8 14.3% 2.7% 3 eradicated marihuana plants Cotopaxi 43.5 48.6% 21.7% 1,485 eradicated poppy plants Chimborazo 5.9 49.7% 24.5% 71,000 poppy plants eradicated Azuay 2.5 29.7% 11.2% Other 4.29
U.S. International Trade Commission, Trade Database on U.S. Imports for Consumption at Customs Value for HTS8 07108097. 2 Id. 3 Request by the Ecuadorian American Chamber of Commerce and APROFEL for Addition of Ecuadorian Broccoli to GSP, p. 6 (Oct. 5, 2012). 4 Andean Trade Preference Act: Effect on the U.S. Economy and on Andean Drug Crop Eradication and Crop Substitution, Comment by the Ecuadorian American Chamber of Commerce, U.S. International Trade Commission Investigation No. 332-352, p. 6 (June 28, 2012). 5 Nathalie Cely, et al., The Discovery of New Export Products in Ecuador, Inter-American Development Bank Working Paper Series 165th ser., p. 39 (2010). 6 Id. 7 Id. at p. 108. 8 Data provided by the Central Bank of Ecuador. 9 U.S. International Trade Commission, Trade Database of U.S. Imports for Consumption at Customs Value for HTS8 07108097. 10 Information provided by members of the private sector. 11 Request by the Ecuadorian American Chamber of Commerce and APROFEL for Addition of Ecuadorian Broccoli to GSP (Oct. 5, 2012). 12 Request by the Ecuadorian American Chamber of Commerce and APROFEL for Addition of Ecuadorian Broccoli to GSP (Oct. 5, 2012). 13 Nathalie Cely, et al., The Discovery of New Export Products in Ecuador, Inter-American Development Bank Working Paper Series 165th ser., pp. 40-43 (2010). 14 Request by the Ecuadorian American Chamber of Commerce and APROFEL for Addition of Ecuadorian Broccoli to GSP, p. 19 (Oct. 5, 2012). 15 Id. at p. 9. 16 UNODC, Technical Report on Indicators of Illicit Cultivation in Ecuador (2010), http://www.unodc.org/documents/peruandecuador//Informes/monitoreo-ecu/Ecu10_Coca_Survey.pdf. 1