Pubdate: Thu, 24 Jan 2002
Source: New York Times (NY)
Copyright: 2002 The New York Times Company
Contact:  http://www.nytimes.com/
Details: http://www.mapinc.org/media/298
Section: Business
Author: Anthony DePalma

IN TRADE ISSUE, THE PRESSURE IS ON FLOWERS

Congress's failure to renew an unusual antinarcotics program that used 
flowers to fight drugs means that tariffs are now being collected on roses, 
carnations and certain other products imported from four South American 
nations for the first time in a decade.

So far, the additional cost of the tariffs — about 5 cents a rose — has not 
generally found its way into the retail prices of fresh flowers, and the 
supply of imports has remained steady. But with Valentine's Day three weeks 
away, florists say that some of the extra cost may be passed on to consumers.

If the tariffs are not lifted soon, said Steve Neubauer, president of the 
Independent Florists' Association, "we may see some adjustment in prices."

Congressional leaders say that in the new session that began yesterday, 
they will again try to remove the tariffs by extending a trade pact with 
the four Andean nations, Bolivia, Colombia, Ecuador and Peru. The pact was 
set up to use economic development to counter narcotics trafficking.

To give some impetus to what is considered to be a fairly remote issue in a 
time of pressing national matters, the extension may be packaged with three 
other Bush administration priorities, including the trade promotion, or 
fast-track, authority bill. All four may go to the floor for a final vote 
at the same time, perhaps in early March.

In the last session of Congress, a similar piggybacking strategy backfired 
when a six-month extension of the Andean trade bill was tucked into an 
economic stimulus package being considered in the Senate. The stimulus 
package was held up, and the trade pact expired on Dec. 4.

After a period of confusion over what to do about the tariffs, customs 
officials in the United States began collecting the duties at ports of 
entry late last year. Importers now pay a 6.8 percent tariff on Colombian 
roses, which arrive in Miami and other major ports. All other flowers from 
the Andean nations come in under a 6.4 percent levy, except for miniature 
carnations, for which a 3.2 percent duty is charged.

"The vast majority of the people I speak to are just going to absorb the 
extra costs," Mr. Neubauer said. "Given the state of the economy, there's a 
great deal of sensitivity about price."

California still produces a substantial crop of seasonal roses, but more 
than 80 percent of the fresh roses sold in the United States come from 
Colombia. The growth in Colombian exports has taken place largely in the 
decade since 1991, when the the Andean Trade Preference Act was passed.

The legislation was intended to encourage people in rural parts of Bolivia, 
Colombia, Ecuador and Peru to produce legitimate market goods, like fresh 
flowers, instead of the coca leaves and poppies used to make cocaine and opium.

The trade deal also reduces tariffs on certain textiles and on asparagus. 
Peru's asparagus crop is being harvested now, and the country's ambassador 
in Washington, Allan Wagner, has said that the expiration of trade 
preferences may drive some poor Peruvian farmers back to growing coca.

While it is clear that the trade pact has not made the narcotics problem 
disappear, enough progress has been made for a number of influential 
members of Congress to back the idea of extending the pact and expanding it 
to include more goods, like canned tuna from Ecuador and a greater variety 
of textiles.

An extension of the pact until 2005 — when the Free Trade Area of the 
Americas is supposed to be ready — was approved by the House last year. A 
similar measure in the Senate was released from committee but never made it 
to a floor vote.

If the pact is renewed in this session, it will be retroactive to Dec. 4, 
and the duties now being collected on Colombian roses and other goods would 
be refunded.

Peter J. Moran, executive vice president of the Society of American 
Florists, said he had received assurances from Senator Tom Daschle, the 
majority leader, that the issue would not be overlooked this session. "They 
told us that this will be one of their priorities when they return," Mr. 
Moran said. "We'll have to wait and see."
- ---
MAP posted-by: Keith Brilhart