Nutty tariffs
U.S. sanctions and Iranian pistachios
By Mehrdad Valibeigi
August 25, 2000
The Iranian
When Madeleine Albright announced a partial lifting of U.S. sanctions
on Iran in March, the State Department was not aware of the 300 percent
tariff imposed on Iranian pistachios, according to official U.S. sources.
Solving this has become a nagging problem, mainly because the removal of
tariff barriers is a technical issue that requires due bureaucratic processes
at the Commerce Department and the International Trade Commission, both
independent from the State Department.
The issue of pistachio imports from Iran has significant economic consequences
for the Iran, which is trying hard to promote non-oil exports. In the meantime,
and besides the political dimensions, the current level of tariff barriers
has practically kept the Iranian pistachios out of the reach of the American
market. Consumers are paying much higher prices for lower quality pistachios
grown in California or imported from other countries, such as Turkey.
In July, a shipment of Iranian pistachio arrived at U.S. customs in
New York. An American trading company requested a review of the existing
tariff. As an Iranian-American who would like to see improved economic
and, eventually, normal relations between the two countries, I will try
to give a brief account of the main issues involved in this apparently
simple obstacle.
Back in 1986, more than a year before the imposition of U.S. sanctions
by President Reagan, the Association of Californian Pistachio growers filed
a complaint against the Rafsanjan Pistachio Producers Cooperative, the
main producer and exporter of Iranian pistachio to the United States, for
being engaged in "unfair competition" with California pistachio
producers. They alleged that Iranian pistachio is sold at a lower cost
because of direct and indirect subsidies from the Iranian government to
the pistachio farmers.
The Reagan Administration agreed, in part because of intense lobbying
by a number of Iranian pistachio growers in California. Since then the
California pistachio growers have closely watched new developments, and
methodically filed motions every year opposing the removal of the high
tariffs. Privately, however, California growers have been more conciliatory.
They would like to cooperate with Iranian growers to expand into international
markets.
A good example of this gesture was a presentation by the chief attorney
of the California Pistachio Commission, Bob Schramm, during the Iranian
Trade Association's meeting in June. He did not mention the adversarial
actions by California growers. He also avoided mentioning the formation
of a political action committee by the Western Pistachio Association, to
raise $150,000 for an intensive lobbying campaign to keep the Iranian pistachio
out of the U.S. In sharp contrast, Iran's counter efforts have been rather
limited.
The change in the political atmosphere between the two countries and
removal of all sanctions would eventually help Iranian pistachio exporters.
However, there are two other important factors that should be taken into
consideration. First, there needs to be a major change in Iran's foreign
exchange system and the way it affects exports. Second, the pistachio industry
in the U.S. should let go of its monopoly which has driven prices unreasonably
higher than international levels.
September 7 is the U.S. Commerce Department deadline for filing comments
about the tariffs. Those interested in the resumption of Iranian pistachio
sales in the U.S., including Iranian exporters and American importers as
well as American consumer advocates, should join forces and launch a coordinated
public relations and legal campaign to end the Californian pistachio monopoly.
Author
Mehrdad Valibeigi is a professor of economics at the American University
in Washington, DC.
