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Wednesday, 13 February, 2002, 19:18 GMT
Flower tariff taxes US lawmakers' resolve
flowers
Americans may have to pay more for bouquets
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David Schepp
BBC News Online's North America Business Reporter
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New Yorkers can expect to pay an average $80 (56) to send a dozen red roses to a loved one this Valentine's Day.

But failure by the US Congress to reinstate an expanded package of trade benefits targeted at Andean nations may result in even higher prices.

For a decade, from 1991 to last December, imports of duty-free flowers from Colombia and Ecuador increased to the point where 70% of all flowers sold in the US now come from those two Andean nations.

The result has been a boon for American consumers who now enjoy more stable prices and a greater variety of flowers, no longer subject to seasonal variations.

"That's clearly a benefit for the consumer," says Dean Georges, owner of Irene Hayes Wadley & Smythe, a florist shop in Manhattan, and a member of the Society of American Florists.

War of the roses

But the resumption of the tariff regime is set to change all that.

While retailers like Mr Georges have yet to register higher costs, importers and some wholesalers have, and it's just a matter of time before those costs work their way down to consumers, say flower industry experts.

"If there's any difference, we don't see that," Mr Georges told BBC News Online.

The expiry of the duty-free status on products imported from Colombia and Ecuador as well as Peru and Bolivia, could result in higher prices not only for flowers but also for a whole range of commodities, including bananas, oil, minerals and coffee.

Drug-prevention roots

The Andean Trade Preferences Act (ATPA) was implemented under the previous Bush administration as a way to give growers in South American nations viable crops, and prevent them from growing coca, in an effort to stem the flow of narcotics to the US.

While it is not clear what effect the trade pact has had on the flow of drugs, enough progress has been made to persuade some lawmakers that it is worth renewing ATPA.

"If we are serious about halting the flow of illegal drugs into this country," said Senator Bob Graham, a Democrat from Florida, during a recent speech on the Senate floor, "then we must act this year to both extend and expand these trade benefits."

Ecuadorian Foreign Minister Heinz Moeller told the Reuters news agency on Monday, following meetings with senior Bush officials, that it could be "late spring" before Congress completes action on the trade bill.

Legislative quagmire

On Tuesday, foreign ministers from the four Andean countries petitioned lawmakers in Washington to renew the trade pact and expand it to include textiles, tuna and leather products.

But the Andean delegates' efforts may get quashed by a flurry of legislative jockeying that include broader objectives, many of which have polarised Democrats and Republicans.

Proponents hope to tack an extension of the expired duty-free programme onto bills now proposed by the Bush administration, including one calling for Trade Promotion Authority (TPA) for the president.

A similar effort failed last autumn, however.

A six-month extension to the Andean trade bill was part of the economic stimulus bill that failed to make it out of the Senate.

See also:

19 Apr 01 | Business
Latin American investment drops 20%
13 Feb 02 | Business
Venezuela's currency in freefall
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