ITA Ensures Smooth Supply of Papa John's Products to El Salvador
July 12, 2013
(ITA)
The Department of Commerce’s International
Trade Administration (ITA) helped Louisville
based Papa John’s International Inc. overcome a
cheese quota allocation issue in El Salvador.
This could have significantly limited the
company’s ability to adequately supply U.S.
mozzarella to its current and future
restaurants in El Salvador.
Why it matters
If the United States and Papa John’s had not
worked to address the cheese quota allocation
issue with the Government of El Salvador, Papa
John’s risked receiving less-than-favorable
treatment in importing cheese from the United
States, ultimately harming its operations in
country.
The Problem
The Government of El Salvador’s initial
decision to divide the cheese quota negotiated
under the CAFTA-DR into six types of cheeses
was not in accordance with actual in-country
demand. A second U.S. cheese quota distribution
by the Government of El Salvador did distribute
the unused quota amount in accordance with
demand, but this was too little too late for
Papa John’s. Importing cheese outside of the
quota increased costs by 40 percent. The delay
in demand-driven mozzarella quota distribution
prevented Papa John’s from importing more
cheese from the United States. Moreover, had
the Government of El Salvador continued to
reach its cheese quota allocation decisions
without regard to actual market demand, Papa
John’s plans to open several additional
restaurants in El Salvador would have been
jeopardized.
The Solution
The ITA team, with the support of the U.S.
Department of Agriculture (USDA) and the Office
of the U.S. Trade Representative (USTR), worked
with the Government of El Salvador to ensure
that its quota allocation for cheese reflected
market demand and remained consistent with
CAFTA-DR obligation. In March 2012, Papa John’s
reported that it was pleased with its 2012
cheese allocation as mozzarella was given over
70 percent of the initially assigned cheese
quota. The Government of El Salvador is now
taking into account market demand for the
product. Because of ITA’s successful
intervention, Papa John’s was able to open
several new restaurants in El Salvador.
Working closely with U.S. companies, ITA
creates, expands, and defends market access for
U.S. goods and services overseas through the
Trade Agreements Compliance Program. “We
promote policy that develops a more favorable
business climate for U.S. companies in global
markets; we employ commercial diplomacy to
resolve trade barriers; and we leverage our
bilateral and multilateral trade agreements to
ensure our trading partners live up to their
commitments so that our businesses can compete
on a level playing field.” - Assistant
Secretary of Commerce for Market Access and
Compliance, Michael C. Camuñez.
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