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.
Welcome to the Exporting Source
Your one-stop resource for finding help to export to new customers, to learn about government export programs, to join export-promoting trade missions, to sign up for trade conferences and training, and to link to other exporting services. Whether you're an old hand at exporting or just getting started, the Exporting Source provides a place to locate foreign customers, export financing and foreign investment assistance.