If Europe's tomato processing industry does not receive protection from the Transatlantic Trade and Investment Partnership being negotiated between the European Union (EU) and the United States, the sector is likely to disappear in Portugal.
For Miguel Cambezes, General Secretary of the Tomato Manufacturers Association (AIT), "this is more than a real danger; it is almost unavoidable, given the enormous power disparity between California and Portugal's tomato processing sectors."
While the fourth round of negotiations between the EU and the U.S. is underway in Brussels, the AIT reminded that the abolition of tariff protections affecting imports of processed tomato products would benefit the United States a lot more than Europe.
Despite having Europe's highest productivity levels, as well the third highest worldwide, Portugal would receive a heavy blow. The country is currently the world's fourth largest exporter, with 95% of the production being shipped overseas, from which it obtains 250 million Euro in revenue.
Production costs are very different at both sides of the Atlantic, with a clear advantage for California. The main factor is the price of raw goods, which represents more than 50% of the processing costs. In the U.S., these are 20% lower than in Portugal.
In 2012, the EU's volume of concentrated tomato imports from the U.S. was of 74,000 tonnes; 21.3% of the United States' total exports. That same year, the United States' volume of concentrated tomato imports from the EU amounted to 3.9 million tonnes; 38.5% of all imports. This year, the U.S exported 19 times more concentrated tomato to the EU than it imported from it.
Source: AIT