- Citrus fruits tariffs
- Trade Agreements/Free Trade Area of the Americas (Brazil-Florida Case)
- Sanitary and phytosanitary measures
- China in the World Trade Organization
- Market support policies
- Promotion policies
- Deregulation

Economic policies in the citrus fruit sector may be formalized in the form of market access measures for imported citrus products, such as tariff barriers or technical barriers to trade, direct support policies, or by enhancing demand through promotional activities and differentiation of the product.

Tariffs

Import tariffs are widely used as a market access barrier in order to restrict imports of citrus fruits and citrus juices and protect national production. However, as a result of the Marrakech Agreement on agriculture in 1994, there has been a process of reduction of tariffs on imported citrus fruits and citrus juices. For addictional information on this subject, see USDA-Foreign Agricultural Service: GATT/WTO and Citrus. The following table shows the FCOJ tariff schedule for major orange juice importing countries under GATT:

Source: The World Market for Citrus Products and Risk Management for Florida Citrus Growers, Thomas H. Spreen and Ron Muraro, Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, October 2000
* Note: SSE=Single Strength Equivalent

The average allowed WTO tariff for oranges is 49%. The average allowed WTO tariff on frozen concentrated orange juice is 53%. See Whats at Stake for Oranges? and Whats at Stake for Orange Juice? (USDA Foreign Agricultural Service, U.S. Proposal for Global Agricultural Trade Reform, Commodity Fact Sheets).

The Florida Department of Citrus provides useful links for information on citrus tariffs in Foreign Trade Information.

Trade agreements/Free Trade Area of the Americas (Brazil-Florida Case)

Some citrus producing countries have reached trade agreements with other countries or groups of countries in order to benefit from preferential treatment through the reduction of the level of tariffs or even the allowance of duty-free entry. These trade agreements expand market opportunities. See: Trade Agreements and World Juice Markets, Tom Spreen, University of Florida, Report for 8th Annual International Economic Outlook Conference for Citrus and Non-Citrus Juices, New York October 22-23, 2002.

In the European Union, the tariff-quota system applied includes some preferential arrangements, such as the preferential entry prices for some Mediterranean countries, in the context of Euro-Mediterranean Association Agreements. The eventual creation of an Euro-Mediterranean Free-Trade Area would have significant effects in fresh citrus fruits trade.

The most active country in trade agreements for citrus fruits is the United States of America. For instance, the United States and Japan signed in 1988 the Japan Beef and Citrus Agreement. In 1984, the Caribbean Basin Economic Recovery was implemented, allowing Belize, Costa Rica and the Dominican Republic to develop their citrus processing industries and export to the United States. Under the North American Free Trade Agreement, NAFTA, the United States and Mexico agreed to phase out their tariffs on orange juice imports over a 15 year period, beginning in 1994.

The negotiations for the Free Trade Area of the Americas (FTAA) are particularly difficult regarding the citrus sector since this area would include the two major players dominating world trade in orange juice, Florida and Brazil. This is one of the aspects of what can be named as the Brazil-Florida Citrus Case. See The Citrus Wars. If ageeed, by 2005, the FTAA would create a free-trade zone that would include nearly all of the countries in the Western Hemisphere. This would imply that Brazilian orange juice would be imported duty-free into the United States, consequently having a significant effect in international trade in orange juice.

Florida growers consider that this would negatively affect the Florida citrus sector, since Brazilian oranges are grown and processed at lower production costs and the elimination of the US tariff could flood the country with cheaper Brazilian orange juice. By the end of 2002, the United States imposed a tariff of 29.7 cents per SSE gallon on FCOJ and a tariff of 17.04 cents per gallon on single strength orange juice. US production is more costly due to higher wages, taxes and environmental and agricultural regulations. The competitive position of the citrus sector in Brazil and Florida is analyzed in: A Comparative Analysis of Citrus Costs and Returns, 1980-2000, Florida, U.S.A. and Sao Paulo, Brazil Mark A. Wade, University of Florida, U.S.A.; Evaristo Neves, University of So Paulo, Brazil; Cristiano Ramos, University of So Paulo, Brazil, World Food and Agribusiness Symposium, 2001. However, since citrus would be considered a sensitive product in the negotations, there could be the possibility that the tariff reduction would be phased out. In any case, as it has been noted in the Marketing Chain Section, Brazilian companies have already reacted to the US orange juice tariff by entering the USA market through investments in the purchase of existing processing plants in Florida (See Osava, Mario (2002), Protectionism in North Punishes Citrus Growers Threefold, Terra Viva, no.19, 29 January)

The effects of the FTAA are explored in different publications:

- The Free Trade Area of the Americas and the Florida Citrus Industry, Thomas H. Spreen, FRED University of FL, November 14, 2002
- The Free Trade Area of the Americas and the Market for Processed Orange Products , Thomas H. Spreen, China/FAO Citrus Symposium, 14-17 May 2001 Beijing Peoples Republic of China
- The impact of elimination of the U.S. Orange Juice Tariff on the market for processed orange products Thomas H. Spreen, Charlene Brewster And Mark A. Brown, May 2002.
- Florida Citrus and International Trade, Position of Florida Citrus Mutual
- The Citrus Perspective, Andy LaVigne, Florida Citrus Mutual, Executive Vice President/CEO, November 1, 2001
- Market Access in the Free Trade Area of the Americas Negotiations, Written Testimony By Florida Citrus Mutual, Andrew Lavigne, August 21, 2002, Before the International Trade Commission

According to Florida Citrus Mutual, "the North American orange juice market is the leading orange juice market in the world. The development and growth of this market was to a large extent financed by Florida citrus growers, who have invested hundreds of millions of dollars through a self-imposed marketing and advertising tax". Florida growers pay this state tax on each box of citrus harvested with the purpose of financing the Florida Department of citrus in its promotion of Florida´s citrus fruits, juices and related products. Since 1970 the State of Florida has imposed an "equilizing excise tax" (EET) on imported processed citrus products, in order to make juice importers share the cost of Florida´s marketing programs. Citrus growers in other US states were exempt from EET. As a result, in 2002 five international companies importing orange juice filed a lawsuit against the Florida Department of Citrus in order to abolish EET. In April 2002, a state court in Florida ruled that this exemption for domestic juice was unconstitutional to the extent that it favoured juice made from citrus fruit grown in US states other than Florida. As a result, the law was amended on 1 July 2002, to eliminate the exemption for juice produced in states other than Florida. In addition, EET has been the subject of a complaint at the WTO by Brazil, requesting first consultations with the United States and the establishment of a Panel on this issue: WTO, Panels established to examine US measures on "orange juice" and "softwood lumber" . See also, Florida-Brazil Citrus Case, Trade policy monitor, Number 4, April 2002 and Florida Citrus Agrees to Tax Cut, By Kevin Bouffard, The Ledger, February 20, 2003.

Sanitary and phytosanitary measures

Sanitary and phytosanitary (SPS) measures are technical regulations designed to prevent a potentially adverse impact of international trade on human, animal or plant life or health. The purpose is to protect consumer and national heath and safety. The Agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS Agreement") entered into force with the establishment of the World Trade Organization on 1 January 1995. It concerns the application of food safety and animal and plant health regulations and sets out the basic rules for food safety and animal and plant health standards.

In the recent past there has been an increasing number of trade disputes as a result of bans on citrus products imports based on phytosanitary policies. As an example, Clementines from Spain were banned by USDA in December 2001 after live Mediterranean fruit fly larvae were found in several shipments already in the United States. In October 2002, the U.S. Department of Agriculture's Animal and Plant Health Inspection Service (APHIS) amended its regulations to allow the importation of clementines from Spain to resume under controlled conditions. The new requirements include provisions that the clementines be grown in accordance with a Mediterranean fruit fly management program established by the government of Spain, that the clementines be subject to an inspection regimen that includes fruit cutting before and after cold treatment, and that the clementines meet other conditions designed to protect against the introduction of the Mediterranean fruit fly (See APHIS Clementines).

For more information on SPS and citrus fruits:
- Sanitary and phytosanitary issues and the SPS Agreement, Joo Magalhes, WTO Secretariat, China/FAO Citrus Symposium Beijing, 14-17 May 2001
- The Role of SPS Barriers in Fruit Juice and Fresh Fruit Markets, Suzanne D. Thornsbury, Presented to the 7th International Economic Outlook Conference for Citrus and Non-Citrus Juices October 26-27, 2000
- Sanitary and Phytosanitary Issues: Where does the WTO go from here? Suzanne Thornsbury, Center for International Business Education and Research (CIBER), Working paper series 00-29, 2000.
- Sanitary and phytosanitary measures, citrus industry and trade, FAO Intergovernmental Group on Citrus Fruit, Twelfth Session, Valencia, Spain, 22-25 September 1998.
- Phytosanitary and Sanitary Regulations: The Effect on International Trade of Fruits and Vegetables, National Food and Agricultural Policy Project Policy Paper Series June 1996.

China in the World Trade organization

Given the size of the market in China and its potential as an emerging market, the accession of China to the WTO provides opportunities for citrus fruits and juices imports from other countries.

This subject is further developed in China/FAO Citrus symposium 14-17 May 2001 Beijing Peoples Republic of China; China & WTO, Horticultural & Tropical Products Division, Foreign Agricultural Service, USDA; Agriculture and China's Accession to the World Trade Organization, Charles E. Hanrahan, CRS Report for Congress, March 2001.

Market support policies

Normally, producer support measures may not be separately idenfied for citrus fruits. They fall under support measures for agricultural commodities in general. These measures may include administered prices, subsidies and tax and investment incentives.

Since the European Union is the major importing area for citrus fruits and orange juice, the most relevant example of market support measures in this sector is the Common Agricultural Policy (CAP) of the EU. In this context, the citrus sector is regulated by the Common Market Organization for fruits and vegetables, which was reformed as a part of the global reform of the CAP in 1996. This reform partially shifted the policy from market intervention measures to supporting producers through producer organizations (the most relevant for citrus fruits are Intercitrus and Ailimpo in Spain). It also introduced minimum entry prices and took into account the Uruguay Round accord.

See: Council Regulation (EC) N° 2200/96 of 28 October 1996 on the common organization of the market in fruit and vegetables and Council Regulation (EC) N° 2201/96 of 28 October 1996 on the common organization of the markets in processed fruit and vegetable products . It was later amended in 2000: European Commission, Fresh Fruit and Vegetables , Council Regulation (EC) N° 2699/2000 of 4 December 2000 amending Regulation (EC) N° 2200/96 on the common organisation of the market in fruit and vegetables, Regulation (EC) N° 2201/96 on the common organisation of the market in processed fruit and vegetables and Regulation (EC) N° 2202/96 introducing a Community aid scheme for producers of certain citrus fruits. EU Regulations for fruits and vegetables are listed in EU Commission Regulations, Fresh Fruit and Vegetables and EU Commission Regulations, Products processed from fruit and vegetables. Domestic support policies for citrus include export refunds, product withdrawal from the market, intervention thresholds and direct producer aid. The EU also applies a proccessing aid scheme for producers of certain citrus fruits: Commission regulation (EC) N° 1092/2001 of 30 May 2001 laying down detailed rules for the application of Council Regulation (EC) N° 2202/96 introducing a Community aid scheme for producers of certain citrus fruits

According to the European Commissions notification to the World Trade Organization, the EC provides $204 million worth of support to the EU Clementine producers (Aggregate Measure of Support, AMS). An additional $71 million was specific to mandarin producers and another $14 million was allocated to producers of the satsuma variety. As an aside, the orange producers received approximately $478 million to assist in their efforts.(See The effects of EU Policies on the competitive position of the U.S. & EU Horticultural Products Sectors, California Citrus Mutual, Joel Nelsen, President, Statement to the International Trade Commission, April 26, 2001).

For more detailed analysis of EU policy on the citrus sector, see:
- European Union Farm Policy for Citrus, Tomatoes and Dairy, Damian C. Adams, J.D. and Richard L. Kilmer, International Agricultural Trade and Policy Center, January 2003.
- European Union Agricultural Situation, EU Fruit and Vegetables Regime, USDA GAIN Report, 2001.

Promotion policies

Promotional campaigns and marketing policies that seek to encourage and enhance citrus consumption are crucial for improving citrus demand situation. These strategies try to highlight and inform about the dietary, nutritional and health benefits of citrus fruits and citrus juices consumption. They are encouraged in the EU: EU Agriculture, Promotional Measures. An example of a citrus campaign in this context is Orange and Clementine advertisement campaign in European Community countries 2002-2003 by INTERCITRUS. Examples of citrus promotion in the United States are TexaSweet marketing programs (See Market Promotion, Merritt Taylor, Charles Hall and Gustavo Molina, Texas Agricultural Extension Services, Texas Citrus) and Florida Department of Citrus (See Florida citrus industry boosts consumption with extensive, health-focusedadvertising & promotion, Dan Campbell, USDA, Rural Cooperatives Magazine, September October 2001 and Florida Orange Juice The Best Start Under the Sun. Online Advertising Case Study)

These measures would also seek to highlight the advantages of citrus products from a certain origin in terms of quality, like the Protected Geographical Indication in the EU. See Citricos Valencianos as example.

Deregulation

Apart from the process of liberalization of international trade, during the nineties, some producing countries have also assisted to a process of internal de-regulation of the citrus fruits sector. This has been the case for countries such as Israel and South Africa. Before these reforms the system was characterized by strong State intervention. These changes in domestic regulatory environment are illustrated in:
- Regulating South Africas Citrus Export Commodity Chain(s) after Liberalisation, Charles Mather School of Geography, Archaeology and Environmental Studies University of the Witwatersrand, 2003
- An Economic Analysis of the Deregulation of Selected Israeli, South African and South American Producer Boards A Report Prepared for MAF Policy - Citrus Sector in Israel (Ministry of agriculture, New Zealand)

Some useful links for economic policies in the citrus fruits sector in different countries and in general, are the following:

- Citrus policy developments : FAO Intergovernmental Group on Citrus Fruit, Twelfth Session, Valencia, Spain, 22-25 September 1998,
- The Impact of Agricultural Support Policies and WTO on China's Citrus Industry : China/FAO Citrus Symposium, 14-17 May 2001 Beijing Peoples Republic of China,
- Trade policy Horticultural Products : United States Department of Agriculture, Foreign Agricultural Service, Horticultural and Tropical Products Division
- International Agricultural Trade and Policy Center : University of Florida,
- World Trade Organization
- European Union
- United States Trade Representative