Ecuadorian Roses are Now Duty-free Fresh-cut roses added to the GSP as of November 1, 2020
In a move that will save the floral industry an estimated $15-20 million next year, the U.S. Government just added fresh-cut roses to the Generalized System of Preferences, or GSP. This means that as of November 1, floral businesses will no longer have to pay a 6.8% tariff on Ecuadorian roses.
This change is a significant win for the U.S. floral industry, which imports nearly 80% of all cut flowers purchased. Almost 95% of those imported flowers come
from countries with trade agreements with the U.S., so no tariffs are applied. However, Ecuador has no trade agreement with the U.S.; the floral industry had to pay the 6.8% duty on all Ecuadorian roses—until now.
This change doesn’t just affect importers; the cost reduction will help businesses across the floral industry supply chain. “In these challenging economic times, removing the tariff is welcome bottom-line relief to hard-hit segments of the U.S. floral industry,” said Kate Penn, CEO of the Society of American Florists (SAF). “By eliminating this extra cost of doing business, which has been either absorbed or passed along, the entire industry benefits.”
Working Together Equals Success
The SAF is a powerful voice for the floral industry that protects our interests by working with government agencies and officials. SAF collaborated with many other industry groups for over a year, including the Association of Floral Importers of Florida and Flor Ecuador. Their combined efforts culminated in SAF submitting a formal petition to the U.S. Trade Representative in March 2020.
That petition’s approval brings much-needed relief throughout the floral industry in these challenging times, and it happened because industry leaders worked together. As SAF Board Member and our Director of Sales Oscar Fernandez put it: “It goes to show the strength of the floral industry. When we come together, when we work collectively, we can make big things happen.”
Duty-free Imports vs. Domestic Rose Production
While duty-free Ecuadorean roses are a positive step for the floral industry in general, not everyone supported this petition. On November 2, the California Cut Flower Commission (CCFC) and Certified American Grown (CAG) issued a press release voicing their concerns. Dave Pruitt, CCFC’s chief executive officer and CAG’s administrator, stated: “It’s both surprising and disappointing that this administration, which prides itself on protecting American agriculture and workers, would choose to put our industry at further risk. This is especially the case given the catastrophic impact the ongoing pandemic has had on American rose growers.”
The USTR considered this concern of eroding market share for American growers when making its final decision. In the GSP hearings, the SAF testified that removing the duty would not result in an increase in imported products: The U.S. currently imports Ecuadorian roses in an amount that almost equals the Competitive Need Limitation—the cap on imported products that could benefit from GSP. This GSP change, they testified, would not harm domestic rose production, which accounts for 1.5 percent of the U.S. rose market.
In the end, the overall benefit of eliminating this tariff outweighs any potential downside. This news is a great way to start the holiday season and will significantly benefit the floral industry in the coming years.