Cut Flowers

USITC Publication 3580

February 2003

OFFICE OF INDUSTRIES

U.S. International Trade Commission

Washington, DC 20436
UNITED STATES INTERNATIONAL TRADE COMMISSION

This report was prepared principally by

Joanna Bonarriva

Agricultural Crops and Specialty Products Branch

Agriculture and Forest Products Division

Vern Simpson

Robert A. Rogowsky

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

Director of Operations

Director of Industries

COMMISSIONERS

Marcia E. Miller

Deanna Tanner Okun, Chairman

Jennifer A. Hillman, Vice Chairman

Lynn M. Bragg

Stephen Koplan

Under the direction of

Cathy Jabara and Stephen Burket
 1

 The information and analysis provided in this report are for the purposes of this report only. 

Nothing in this report should be construed to indicate how the Commission would find in an

investigation conducted under statutory authority covering the same or similar subject matter.

i

PREFACE

In 1991 the United States International Trade Commission initiated its current Industry and

Trade Summary series of informational reports on the thousands of products imported into

and exported from the United States. Each summary addresses a different

commodity/industry area and contains information on product uses, U.S. and foreign

producers, and customs treatment. Also included is an analysis of the basic factors affecting

trends in consumption, production, and trade of the commodity, as well as those bearing on

the competitiveness of U.S. industries in domestic and foreign markets.1

This report on cut flowers covers the period 1997-2001. Listed below are the individual

summary reports published to date on the agriculture and forest products sectors.

USITC

publication

number Publication date Title

2459 November 1991 . . . . . . . . . . . . Live Sheep and Meat of Sheep

2462 November 1991 . . . . . . . . . . . . Cigarettes

2477 January 1992 . . . . . . . . . . . . . . Dairy Produce

2478 January 1992 . . . . . . . . . . . . . . Oilseeds

2511 March 1992 . . . . . . . . . . . . . . . Live Swine and Fresh, Chilled, or 

Frozen Pork

2520 June 1992 . . . . . . . . . . . . . . . . . Poultry

2544 August 1992 . . . . . . . . . . . . . . Fresh or Frozen Fish

2545 November 1992 . . . . . . . . . . . . Natural Sweeteners

2551 November 1992 . . . . . . . . . . . . Newsprint

2612 March 1993 ............... Wood Pulp and Waste Paper

2615 March 1993 . . . . . . . . . . . . . . . Citrus Fruit

2625 April 1993 . . . . . . . . . . . . . . . . Live Cattle and Fresh, Chilled, or 

Frozen Beef and Veal

2631 May 1993 . . . . . . . . . . . . . . . . . Animal and Vegetable Fats and Oils

2635 June 1993 . . . . . . . . . . . . . . . . . Cocoa, Chocolate, and Confectionery

2636 May 1993 . . . . . . . . . . . . . . . . . Olives

2639 June 1993 . . . . . . . . . . . . . . . . . Wine and Certain Fermented 

Beverages

2693 October 1993 . . . . . . . . . . . . . . Printing and Writing Paper

2702 November 1993 . . . . . . . . . . . . Fur Goods

2726 January 1994 . . . . . . . . . . . . . . Furskins

2737 March 1994 . . . . . . . . . . . . . . . Cut Flowers

2749 March 1994 . . . . . . . . . . . . . . . Paper Boxes and Bags

2762 April 1994 . . . . . . . . . . . . . . . . Coffee and Tea
ii

PREFACE—Continued

USITC

publication

number

Publication

date Title

2859 May 1995 . . . . . . . . . . . . . Seeds

2865 April 1995 . . . . . . . . . . . . Malt Beverages

2875 May 1995 . . . . . . . . . . . . . Certain Fresh Deciduous Fruits

2898 June 1995 . . . . . . . . . . . . . Certain Miscellaneous Vegetable Substance

and Products

2917 October 1995 . . . . . . . . . . Lumber, Flooring, and Siding

2918 August 1995 . . . . . . . . . . Printed Matter

2928 November 1995 . . . . . . . . Processed Vegetables

3015 February 1997 . . . . . . . . . Hides, Skins, and Leather

3020 March 1997 ........... Nonalcoholic Beverages

3022 April 1997 ............ Industrial Papers and Paperboards

3080 January 1998 . . . . . . . . . . Dairy Products

3083 February 1998 . . . . . . . . . Canned Fish, Except Shellfish

3095 March 1998 ........... Milled Grains, Malts, and Starches

3096 April 1998 ............ Millwork

3145 December 1998 . . . . . . . . Wool and Related Animal Hair

3148 December 1998 . . . . . . . . Poultry

3171 March 1999 . . . . . . . . . . . Dried Fruits Other Than Tropical

3268 December 1999 . . . . . . . . Eggs

3275 January 2000 . . . . . . . . . . Animal Feeds

3350 September 2000 . . . . . . . . Grain (Cereals)

3352 September 2000 . . . . . . . . Edible Nuts

3355 September 2000 . . . . . . . . Newsprint

3373 November 2000 . . . . . . . . Distilled Spirits

3391 January 2001 . . . . . . . . . . Cotton

3405 March 2001 . . . . . . . . . . . Sugar

3461 October 2001 . . . . . . . . . . Cured Fish

3463 October 2001 . . . . . . . . . . Fresh or Frozen Fish

3490 February 2002 ......... Wood Pulp and Waste Paper

3476 February 2003 . . . . . . . . . Oilseeds
iii

CONTENTS

Page

Preface ...................................................................... i

Abstract .................................................................... 1

Introduction ............................................................... 3

The product ................................................................ 4

Production process ........................................................... 5

Fresh cut flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Dried and preserved flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

U.S. industry profile ................................................... 8

Industry structure ............................................................ 8

Cut flower operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Geographic distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Vertical integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Globalization in the cut flower industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Marketing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

U.S. market ................................................................ 17

Consumer characteristics and factors affecting demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

U.S. trade .................................................................. 19

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Import levels and principal suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

U.S. trade measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Tariff measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Nontariff measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
iv

CONTENTS—Continued

Page

U.S. trade—Continued

U.S. Government trade-related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

U.S. exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Principal markets and export levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Foreign trade tariff and nontariff measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Foreign industry profile .............................................. 29

Global trade and market conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Eastern and Southern Africa: Kenya, South Africa, and Zimbabwe . . . . . . . . . . . . . . . . . 32

Appendixes

A. Explanation of tariff and trade agreement terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Figures

1. Major distribution channels for fresh cut flowers in the United States . . . . . . . . . . . . . . . . . . . . . . . 9

2. Major distribution channels for preserved flowers in the United States . . . . . . . . . . . . . . . . . . . . . . 10

Tables

1. Fresh cut flowers: U.S. production in major producing States, 1997-2001 . . . . . . . . . . . . . . . . . 11

2. Cut flowers: U.S. production, exports of domestic merchandise, imports for

consumption, and apparent consumption, 1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

3. Fresh cut flowers: U.S. production, by major flower types, 1997-2001 . . . . . . . . . . . . . . . . . . . . 20

4. Cut flowers: U.S. exports of domestic merchandise, imports for consumption, and

merchandise trade balance, by selected countries, 1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . 21

5. Fresh cut flowers: U.S. imports for consumption, by principal sources, 1997-2001 . . . . . . . . . . 22

6. Preserved flowers: U.S. imports for consumption, by principal sources, 1997-2001 . . . . . . . . . 23

7. Cut flowers: U.S. imports for consumption, by major types, 1997-2001 . . . . . . . . . . . . . . . . . . . 24

8. Cut flowers: Harmonized Tariff Schedule subheading; description; U.S. col. 1 rate

of duty as of Jan. 1, 2002; U.S. exports, 2001; and U.S. imports, 2001 . . . . . . . . . . . . . . . . . 25

9. Fresh cut flowers: U.S. exports of domestic merchandise, by principal markets,

1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

10. Preserved flowers: U.S. exports of domestic merchandise, by principal markets,

1997-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
OMB No.: 3117--0188

02/03

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Industry and Trade Summary: Cut Flowers

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ITS: Cut Flowers
1

ABSTRACT

This summary addresses trade and industry conditions for fresh and preserved cut

flowers for the period 1997-2001.

• Over the last two decades the U.S. market for fresh cut flowers has become

increasingly served by imports. The United States is an important market for

South American growers, especially those in Colombia and Ecuador, because

of strong U.S. demand and high disposable incomes. These and other

developing country producers have a competitive advantage over U.S. growers

because of their low wage rates, smaller climate control investments, and

weaker currencies.

• Due to increased global supply of fresh cut flowers, especially roses, since the

early 1990s, fresh cut flower import prices have fallen significantly. In the

face of increasing low-priced import competition, many U.S. growers have

shifted production to specialty cut flowers that are not imported in significant

volumes, and to other floriculture crops. U.S. production of roses and certain

other flowers has fallen significantly. Sales by U.S. fresh cut flower growers,

except in Western States, have fallen to about one-half of 1992 levels.

• Almost 85 percent of total U.S. imports of cut flowers in 2001 entered dutyfree under preferential trade programs. The majority of those imports entered

under the Andean Trade Preferences Act that benefits Bolivia, Colombia,

Ecuador, and Peru. 

• In addition to Latin America, governments in Africa and Asia have

encouraged the development of cut flower export industries in their countries

as a mechanism to employ large numbers of semiskilled workers and to attract

U.S. dollars to their economies. The Netherlands, Colombia, and Ecuador are

the largest exporters of cut flowers in the world; however, Eastern and

Southern African countries such as Kenya, South Africa, and Zimbabwe are

becoming important players in the global cut flower export market.

 1

 The HTS defines the product as “fresh cut flowers and flower buds used in bouquets or for

ornamental purposes, and dried, dyed, bleached, impregnated or otherwise prepared cut flowers

used in bouquets or for ornamental purposes.”

 2

 Other floriculture crops, such as potted flowering plants, foliage plants, and bedding/garden

plants (provided for in HTS heading 0602), or cut greens, foliage, and ornamental grasses

(provided for in HTS heading 0604), are not covered in this summary. 

3

INTRODUCTION

This summary covers fresh or preserved cut flowers classified for tariff purposes in chapter

6, heading 0603 of the Harmonized Tariff Schedule of the United States (HTS), which

provides for fresh and preserved cut flowers.1

 Also included within the scope of this

summary are bouquets, floral baskets, wreaths, and similar articles made wholly or partly

from fresh cut and preserved flowers, which account for a significant share of final

consumption of fresh cut and preserved flowers.2

 However, fresh cut and preserved flower

production are valued in this summary at their first stage of production. Information is

presented on the structure of the U.S. industry, imports and exports, consumers, foreign

industries, and domestic and foreign tariff and nontariff trade measures. The analysis

primarily covers the time period from 1997-2001. 

The United States is the third-largest producer of cut flowers in the world; production was

valued at $424 million in 2001, down from $472 million in 1997. Almost all domestic

production serves the U.S. market, which has seen increasing demand for cut flowers since

the late 1980s. The United States has one of the most diverse cut flower markets, with all

types of fresh flowers arriving from all over the world. Roses are the leading fresh cut flower

produced and consumed in the United States (based on value) and, in 2001, accounted for

almost 30 percent of fresh cut flower shipments. Chrysanthemums and carnations accounted

for nearly 10 percent each. As a result of increasing imports over the last two decades, U.S.

production of certain flowers, especially roses, has fallen significantly.

The majority of the U.S. market for fresh cut flowers is served by imports. The United States

is an important market for foreign growers, mostly from South America, because of strong

demand and high disposable incomes. Imports were valued at $551 million in 2001, down

from $579 million in 1997. Imports supplied approximately 60 percent of U.S. consumption

during the period 1997-2001, with Colombia supplying more than one-half of such imports.

Imports from Ecuador and the Netherlands together accounted for about one-quarter of the

total. Fresh cut roses, carnations, and chrysanthemums were the principal types of cut

flowers imported. Mexico was the principal supplier of preserved flowers.

In recent years, fresh cut flowers have accounted for 85-90 percent of U.S. consumption of

products covered by this summary. Data are not available on the principal preserved flowers

produced and consumed in the United States, but delphinium, roses, lavender, and statice are

believed to be the most important.
 3

 Roses used for landscaping are not included in this summary.

 4

 Ann Hooper, “Roses: the straight scoop,” Flower & Garden, Jan. 2001, Vol. 45, Issue 1,

p. 22.

4

The Product

Cut flowers are parts of plants, characteristically including the blooms or “inflorescences”

and some attached plant materials, but not including roots and soil. Fresh cut flowers are

highly perishable because they maintain only limited life-supporting processes by taking

water up through their stems. Fresh cut flowers are used for decorative purposes such as vase

arrangements and bouquets at formal events; designs for weddings and funerals; gifts on

occasions such as Mother’s Day, Valentine’s Day, in times of illness, and at holidays such

as Christmas and Easter; corsages and boutonnieres; and informal displays to beautify homes

and public places. More than 200 different types of fresh cut flowers are sold in the United

States.

Preserved flowers are fresh cut flowers that have been dehydrated, preserved with a chemical

solution and then air- or oven-dried. They may be used in boutonnieres, corsages, wreaths,

formal and informal displays, and similar ornamental articles. Preserved flowers, known in

the industry as “everlasting flowers” or “everlastings,” are not as perishable as fresh cut

flowers. 

The three principal types of fresh cut flowers produced in the United States and the world

are roses, carnations, and chrysanthemums. Roses are deciduous woody perennials that can

be used for cut flowers, drying and preserving, and for landscaping.3

 Roses are members of

the Rosacea family; at least 100 species and thousands of varieties are known to exist. The

most commercially important types of roses are sweetheart (intermediate), hybrid tea, and

spray roses. Sweetheart roses have one small bloom per stem, generally one-half inch to

2 inches in diameter, and are typically used in bridal bouquets. Hybrid tea roses also have

one bloom per stem but with a much larger flower head, ranging from 3 to 6 inches in

diameter. Spray roses are a relatively newer variety with multiple blooms, one-half inch to

2 inches in diameter, growing off of a single stem. Although the most typical roses are red,

they may be almost any color except true blue or black.4

 As fresh cut flowers, roses may last

3 to 7 days in the home without the use of floral preservatives, depending on the variety of

the rose and environmental factors such as temperature and care. The vase life of a rose can

be doubled when floral preservatives are used.

Carnations are members of the Caryophyllaceae or so-called “pink” family. These relatively

inexpensive flowers are divided into two major groups, the standards and the miniatures.

Standard carnations produce double, fragrant flowers 2 to 3 inches across, borne singly on

wiry stems that are 18 to 24 inches long. Carnations may be white, yellow, pink, red, or

multicolored. White carnations are often artificially colored with hues absent in natural

cultivars. Carnations last from 7 to 10 days as cut flowers without the use of a floral

preservative and up to several weeks when a floral preservative is used.

Chrysanthemums are a genus of the Compositae family. The major groups grown

commercially are standards and pompons. Chrysanthemums may be white, yellow, red,

bicolored, or tricolored; they can also be artificially colored. Standard chrysanthemums have

1 flower per stem (stems range from 18 to 36 inches), with the diameter of each bloom
 5

 Win Winogrond, “Cut flowers on the move,” The History of U.S. Floriculture, (Greenhouse

Grower, Meister Publishing Fall 1999).

 6

 USDA, Economic Research Service, Market and Trade Economics Division, Floriculture and

Nursery Crops Situation and Outlook Yearbook, FLO-2002, May 2002. Data includes acreage for

cultivated cut greens, which are not included in the scope of this summary.

 7

 USDA, ERS, Floriculture and Nursery Crops Outlook, Sept. 2002.

5

ranging from 3 to 8 inches. Pompon chrysanthemums have 4 to 6 flowers per stem (stems

range from 18 to 30 inches) with a diameter of 3 to 5 inches. As fresh cut flowers, pompons

last from 10 to 14 days, and standards last from 7 to 12 days, depending on variety and

temperature. Chrysanthemums have been successfully bred into a wide variety of colors,

shapes, and textures, making them the flower of choice for the mass-market bouquet

business.5

Production Process

Fresh Cut Flowers

When, in 1918, researchers at Cornell University proved that plant growth responds to day

length, horticulturists began to artificially control flower exposure to daylight. This

discovery made year-round flowering possible, significantly increasing the economic value

of flowers. 

Today, flower production occurs throughout the year in the United States, in open fields or

within a protective structure. The production method primarily depends on the environmental

conditions of the area and quality considerations. In 1997, the most recent year for which

detailed data are available, flower production took place on approximately 3,444 covered

acres (150 million square feet) and approximately 36,000 acres of open fields.6

 Data for all

floriculture crops show that in 2001 approximately 21,400 acres were cultivated under some

sort of protective structure, while about 41,000 acres were grown on open fields.7

The propagation of flowering plants can be by means of seed, cuttings (either stem tips or

rooted cuttings), bulbs, grafting, or by the process of division. In a covered setting, the

propagative material is typically placed in a mixture of organic material in a raised

greenhouse bench, a shallow concrete box usually 4 feet wide and raised 24 to 36 inches for

drainage. Before planting, the soil is prepared, either by sterilization with steam or the

application of chemicals. Growers may also use prepackaged soilless media (rice hulls, coir,

sand, or composted bark), which have already been pasteurized to kill pathogens, weeds, and

seeds. Soil preparation usually takes place between each harvest. Although seeds or cuttings

are planted directly into the greenhouse bench, bulbs are generally stored and monitored in

cool, dark rooting rooms until they sprout, then transferred to the organic material in the

greenhouse. Wire or plastic mesh is often used to support certain flowers (e.g. roses and

chrysanthemums) as they grow, thereby encouraging a long straight stem. Drip irrigation

lines are generally used to reduce spotting of the flower petals, soil splashing onto the

foliage, and the spread of disease. Water may be treated by reverse osmosis and injected with

fertilizers before being applied to plants. 
 8

 In 2000, USDA reported that 68 percent of the total covered growing area was dedicated to

film plastic structures, while fiberglass and glass structures accounted for 18 and 14 percent,

respectively. Total growing area includes area dedicated to all floriculture crops, including

bedding and garden plants and cut cultivated greens, which are not included in the scope of this

summary. USDA, National Agricultural Statistics Service, 2000 Floriculture Crops Summary,

Apr. 2001.

 9

 Mary Albrecht, Alan Stevens, Susan Stevens, Starting a Greenhouse Business - A

Commercial Grower’s Guide, (Kansas State University, Cooperative Extension Service, June

1994).

 10 Terril A. Nell, Ayumi Suzuki, Ria T. Leonard, James E. Barrett, and David G. Clark,

“Developing Protocols for Cut Flower Longevity,” Department of Environmental Horticulture,

University of Florida, and Michael S. Reid, University of California, Davis, CA, found at

www.endowment.org/projects/nell99.htm, retrieved Jan. 23, 2003.

6

The greenhouse structure may form a completely controlled environment, or just provide

shade or protection from the wind, e.g., an overhead lattice work or a “poly-house” (an

aluminum or steel framework covered with a double layer of polyethylene film). While a

glass greenhouse is the most durable structure, greenhouse panes made of fiberglass sheets

may also be used and typically last 10 to 20 years without replacement. The “poly-house,”

made longer lasting than its predecessors by the availability and low cost of high technology

plastics, may last for up to 4 years. The latter requires significantly less capital investment

than the other types of covered structures and accounts for the majority of protected growing

areas in the United States.8

Air temperature in the greenhouse is commonly controlled by central steam boilers or

individual unit heaters fueled by natural gas or propane and are often combined with

horizontal air flow fan systems to circulate air. Common heating systems for the root-zone

of the plants are electrical-resistance heating strips or pads and small boiler systems that

warm the water as it flows through an array of small tubes under the propagating units. Some

greenhouses are equipped with computer systems that regulate environmental factors such

as heating, cooling, irrigation, fertilization, carbon dioxide, and ceiling shade blackout for

artificial night. Supplemental lighting is often used to control flowering and quality.

During the production process, approximately 50 percent of all direct labor is used in harvest

activities.9

 At harvest, laborers carefully inspect plants for the proper picking stage. Flowers

are harvested when the proper stem length and inflorescence required for sale in the

wholesale market are reached. Generally, the optimal stage of growth for harvesting is when

the flower has just opened. Stems with more than one flower are usually harvested with less

than one-third of the flowers fully opened. The flower stem is cut at the appropriate length

by hand with a sharp knife or pruning shears. Since flower condition will not improve after

picking, growers must calculate the cutting precisely so that the flower will not be past its

prime when it reaches the consumer. 

Postharvest handling methods developed more than 20 years ago on domestically produced

flowers are still current practice in the fresh flower industry.10 Many growers harvest by

accumulating an armful of flowers as they move along an aisle, whereas others employ

picking carts and/or conveyor systems. Some growers have automated systems that can strip

leaves, trim stems, and uniformly bunch flowers that may then be transported on

specially-designed monorails suspended on tracks from the ceiling of the greenhouse. With

automated systems, surfaces are padded to minimize damage to the flowers. In the packing

warehouse, stems are cut for a second time while submerged in water to allow the water to

move up the stems. They are immediately placed in tepid water (110 degrees) with added
 11 Scott M. Aker and William E. Healy,“Enterprise Guide for Southern Maryland: Producing

Cut Flowers - General Field Crop Management,” Fact Sheet-468 Department of Horticulture, The

University of Maryland, 1991.

7

floral preservative for at least 2 to 3 hours to allow for a maximum amount of water uptake.

They can be left temporarily in a cool (less than 60 degrees) location or stored in a 40 degree

cooler overnight for subsequent grading. Flowers that do not retain water and are not kept

at low temperatures will lose water and wilt quickly. 

Grading of cut flowers is done to ensure consistent standards. Stems are generally graded by

stem length (18 to 24 inches for most flower types) and are downgraded for short or broken

stems, poor flower condition, poor foliage condition, or old flowers.11 Sorting machines are

able to grade flowers by length of stem, however, all other factors are still determined by

human decision-making. Pompon chrysanthemums are graded into 250- to 340-gram

bunches containing several stems, while standard chrysanthemums of equal sizes are graded

in groups of 10 or 12. The flower buds are wrapped in cone-shaped plastic sleeves to prevent

damage. Carnations are usually separated into piles of 3 grades, each grade is then bunched

into units of 25 stems. For roses, 25 flowers from an individual grade are bunched with the

heads on an even plane. Stems are then tied together with string and parchment, or waxed

paper is wrapped around the heads for protection. 

Flowers that are destined for nationwide sale are carefully prepared to maintain flower

quality. Boxes are often packaged using “wet packs” to allow the flowers to remain in water

throughout their transport. Packed boxes can be pre-cooled by units that fill them with

98 percent humid, cool air for added protection. The boxes are then transported by

refrigerated truck or by air to customers.

Dried and Preserved Flowers

The production process for dried and preserved flowers is similar to that of cut flowers up

to the point of harvesting. Flowers are cut, bunched, and then dehydrated in mechanical

dryers or in the sun, or preserved chemically. Preserved flowers are placed in a solution of

glycerin and water for a period of 3 to 7 days. As the solution is drawn up the plant stem and

into the flowers, the water in the plant tissue is replaced with glycerin, yielding a final

product that will remain soft and pliable for several years. Since the flowers naturally turn

brown as the tissues degrade, dye may be placed in the solution to be drawn up the stem. The

glycerin-preserved flowers are then placed in industrial dryers at a temperature of about 60

to 75 degrees Fahrenheit while fans remove humidity from the air. Colors can also be applied

to the flowers after drying by immersing the flower bundles in hot vegetable-based dyes. The

dyed flowers are then returned to the dryer for a period of 3 to 4 days. When the drying

process is complete, the flowers are arranged and then packaged for retail sale.
 12 Cut flower production is covered by North American Industry Classification system

(NAICS) code 111422, which covers establishments primarily engaged in growing and/or

producing horticulture products, etc. 

 13 “Specialty Cut Flowers: A Commercial Growers Guide” (Kansas State University,

Agricultural Experiment Station and Cooperative Extension Service, June 1992).

 14 Common flowers used for preservation in the U.S. are delphinium, larkspur, roses, lavender,

and statice.

 15 U.S. Bureau of the Census, Census of Horticultural Specialties (1998), Vol. 3, Special

Studies, Part 2, Mar. 2000.

8

U.S. INDUSTRY PROFILE

Industry Structure

The structure of the U.S. fresh cut flower industry is illustrated in figure 1.12 Although

market channels for cut flowers are growing increasing complex, most fresh cut flower

production moves through the traditional market channels, from growers to wholesalers to

retail florists, and finally to consumers. The U.S. industry is generally characterized as

fragmented because each of these industry segments has unique issues and perspectives. The

majority of preserved flowers go from processors to wholesalers to craft stores or retail

florists, and finally to the consumer (figure 2). 

Fresh cut flower growers may sell their products to a flower wholesaler, a florist, or directly

to the consumer. Very small quantities of fresh cut flowers are sold for further processing.

Those growers who focus on selling to wholesalers or florists generally specialize their

operations and limit the number of species grown to one or two. Growers who sell directly

to consumers may grow as many as 15 to 20 different species, with at least 5 available for

sale at any time.13 Some cut flower producers have horizontally integrated by using existing

space to produce other horticultural products such as foliage plants and hanging flower

baskets, which are not covered in this summary. In the greenhouse, efficiency can be gained

by growing these products in the space above the fresh cut flower crop.

Dried and preserved flowers fall into the market segment that also includes dried and

preserved foliage and other plant materials such as pods, sticks, stalks, and weeds, which are

not included in this summary. Dried and preserved flowers make up a very small part of the

dried and preserved plant materials industry as only certain flower types and varieties lend

themselves to the rigors of the preservation and/or drying processes.14

Cut Flower Operations

The total number of U.S. fresh cut flower growers declined by 34 percent from 3,120 in 1988

to 2,067 in 1998 (the only recent years for which official statistics are available on a

disaggregated basis).15 More recent data show that, for growers with more than $100,000 in
9

Figure 1

Major distribution channels for fresh cut flowers in the United States

U.S. growers Foreign growers

Exporter Importer/Broker

Retail florist - Garden center - Mass merchandiser - Super market 

- Convenience store – Discount chain – Wholesale club –

Drugstore- Roadside stand – Street vendor

Individual consumer – institutional user

Wholesaler

Source: U.S. International Trade Commission.
10

Figure 2

Major distribution channels for preserved flowers in the United States

Cut flower 

grower

Processor/distributor/importer

Wholesaler

Mass merchandiser – Craft 

store – Garden center

Individual consumer – Institutional user

Retail florist

Source: U.S. International Trade Commission.
 16 USDA, National Agricultural Statistics Service, Floriculture Crops Summary, Apr. 1998,

Apr. 2002.

 17 John Bartok, “Automating an Industry,” Greenhouse Grower, Fall 1999.

11

sales, there were 615 cut flower growers in 2001, down from 760 in 1997.16 The U.S. fresh

cut flower industry has been going through a prolonged period of consolidation and

contraction in the number of growers, with the remaining growers obtaining larger volumes.

Most fresh cut flower-growing operations are family owned and operated, and the industry

is not generally described as highly concentrated. Although a large number of growers

operate less than 20,000 square feet of growing space, a few large firms cultivate several

million square feet in flower production.17

Geographic Distribution

In the early 1900s U.S. cut flower production was centered around the large population

centers such as New York City, Boston, Philadelphia, and Chicago. The expansion of the

interstate highway system in the 1950s facilitated the transportation of goods over longer

distances, and cut flower growers moved west in search of more favorable growing

conditions. Producers settled predominantly in Colorado, in the area around Denver, and

throughout California. 

Today, although fresh cut flowers are commercially grown in nearly every State, California

is by far the largest fresh cut flower producer, accounting for 66 percent of annual U.S.

production during 1997-2001. Florida, Washington, Hawaii, Oregon, New Jersey, and

Michigan are also important fresh cut flower producing States, together accounting for

20 percent of annual U.S. production in 2001. California, Florida, and Hawaii have climates

that are especially conducive to year-round flower production. Washington ramped up

production over the last 5 years, moving from the sixth most important State in 1997 to third

place in 2001. Colorado lost importance during the period, cutting production by one-half

between 1997 and 2001 (table 1).

Table 1

Fresh cut flowers: U.S. production in major producing States,1 1997-2001

State 1997 1998 1999 2000 2001

––––––––––––––– Value (1,000 dollars) ––––––––––––––

California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307,557 261,548 279,611 288,441 292,115

Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,241 27,398 28,293 28,119 23,168

Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,745 17,736 23,295 19,624 18,857

Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,622 14,383 17,461 16,436 16,221

Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,499 10,214 10,338 10,195 10,698

New Jersey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,916 8,495 9,194 7,128 8,533

Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,514 8,551 4,995 7,624 8,119

Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,932 11,425 10,749 8,156 6,440

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,543 51,845 47,688 44,240 40,105

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471,569 411,595 431,624 429,963 424,256 1

 Data are for production in 36 major producing States for operations with $100,000 or more in annual sales.

Source: Compiled from official statistics from the U.S. Department of Agriculture.
 18 Estimated by staff of the U.S. International Trade Commission.

 19 Ibid.

 20 John Bartok, “Automating an Industry,” Greenhouse Grower, Fall 1999.

 21 Will Carlson, and Dick Meister, “Technology and Productions,” Greenhouse Grower, Fall

1999.

12

There are believed to be three to four large producers of preserved flowers although there

are probably several hundred small-scale (“mom and pop”) producers. Most preserved cut

flower operations are family owned and operated. However, the industry is concentrated,

with one firm dominating.

Employment

Cut flower production requires strict adherence to sanitation and handling requirements to

produce quality finished products. Relatively skilled labor is required in the production of

cut flowers; most of these skills are learned from on-the-job experience and not from formal

education. Data on employment in the U.S. fresh cut flower industry are not available, since

workers used to produce fresh cut flowers are used to produce a variety of other floriculture

crops at the same time. A considerable amount of actual labor in the fresh cut flower sector

is “unpaid” labor of the grower and other family members. It is estimated that the fresh cut

flower industry employed 7,500 full time workers and 5,000 part-time workers annually

during 1997-2001.18 It is estimated that the preserved flower industry employs about 1,000

workers.19

Operations such as planting, harvesting, grading, and packaging traditionally require hand

labor, making labor inputs a significant component of production costs in the cut flower

industry. Labor costs generally account for 25-30 percent of a flower sales value. Recently

however, growers have found that the scarcity of workers is driving labor costs up.

Automation has increasingly been introduced to keep labor costs down or when extra

workers are not available, but such methods can require significant initial capital

expenditures.

Mechanization in the greenhouse generally consists of conveyors to move flowers, seeders,

and automated irrigation. Seeders inject seeds through a nozzle or needle in a manifold that

places one row of seeds at a time, up to 100 trays per hour. With drip irrigation, a series of

small plastic tubes reach into each flower pot from a 1⁄2- to 3⁄4-inch main line extending the

length of a greenhouse bench. With this method, every plant is irrigated at the same time

with exactly the same amount of water. Although automation can significantly reduce grower

costs, manufacturers of specialized equipment have not been attracted to the cut

flowerindustry because of the large number of growers who operate less than 20,000 square

feet of growing space and find the capital expense difficult to justify.20

However, highly automated greenhouses and technological advancements resulting from

extensive applications of research and development do occur in the industry, generally by

the larger growers. These advancements have yielded greater productivity and efficiency at

the grower level.21
 22 Red Kennicott, “Wholesale Changes,” Greenhouse Grower, Fall 1999.

 23 “The Changing Floriculture Industry,” Society of American Florists, June 2001.

 24 Charles Kremp, “Retail Florists Blossom,” Greenhouse Grower, Fall 1999.

 25 “The Changing Floriculture Industry,” Society of American Florists, June 2001.

 26 Red Kennicott, “Wholesale Changes,” Greenhouse Grower, Fall 1999.

 27 “The Changing Floriculture Industry,” Society of American Florists, June 2001.

13

Vertical Integration

Flowers can be marketed by the grower to a flower wholesaler, a retail florist, or directly to

the public by a street vendor or at a farmers market. Traditionally, wholesalers consolidate

product from various growers and sell smaller units to retail outlets. The wholesaler’s

product is often on consignment from the grower; the wholesaler finds buyers for the product

and pays the grower a portion of the sale. Wholesalers have traditionally passed information

regarding demand trends back to the grower who can then modify production accordingly.

Today, market channels for fresh cut flowers are increasingly complex.22 Since in large part

the production of fresh cut flowers for the U.S. market has shifted overseas, some importers

are fulfilling the traditional wholesaler’s role, aggregating product from offshore producers

and farms, and selling directly to retail outlets. Some large U.S. retailers work directly with

brokers who get foreign producers to meet the retailers’ specific requirements.23 Some

importers located in Miami are merely extensions of Latin American growers’ operations.

Vertical integration has allowed some wholesalers to provide better service and more

services than their competitors.24 For example, wholesalers/importers/brokers have set up

bouquet-making operations at the Miami airport or offshore and then ship the final product,

a fully arranged bouquet, directly to retail outlets.25

Cut flower producers in the United States have adapted to the changing market structure.

Some have formed shipping companies and wholesale businesses to market their own

production as well as that of other domestic and foreign producers. Others have established

retail outlets to market cut flowers. In some cases, retail outlets have established cut-flowerproducing operations to supplement their purchases from other domestic producers, shippers,

wholesalers, and importers.

For several decades, especially in California, growers have used flower auctions to sell

directly to retail florists.26 Through the auction system, retail outlets bypass the wholesaler.

In this environment, retailers make decisions based on economic considerations and can

receive a price based on the cost of production, shipping, and other direct costs. The online

grower auction is a relatively recent phenomenon. Business to business commerce over the

Internet, which is an increasingly important factor in business relations across industries, is

successfully uniting flower growers, brokers, retailers, hard goods suppliers, seed companies,

and retailers. 

Although some retailers source product through the auctions, the majority still find the

services a wholesaler provides to be extremely valuable.27 Wholesalers are generally able to

provide the following types of services to retailers: meeting growers/importers minimum

orders; dealing with large consolidated bulk shipments; keeping perishable goods

refrigerated; replacing inferior products quickly and easily; and dealing with product credit

issues of overseas suppliers. Some wholesalers may even provide extended credit to their

retail customers who may periodically experience financial distress and have to slow or cease
 28 Ibid.

 29 Delilah Onofrey, “Courting Consolidation,” Greenhouse Grower, Fall 1999.

 30 “Fading fortune,” Latin Trade, July 2001.

 31 “Industry News,” Floral Management, Society of American Florists, Mar. 2002.

14

payment.28 Most retailers prefer to deal with an intermediary when purchasing product grown

overseas as well, since they do not generally have the time or expertise to deal with trade

credits, quality guarantees, freight, brokers’ fees, and duties, or to identify reliable supply

sources. 

Several unsuccessful attempts were made in the late 1990s by private equity firms to

consolidate multiple firms in different industry segments and take the new companies

public.29 These firms intended to streamline the wholesale distribution of flowers by

consolidating a number of smaller flower growing operations, importers, brokers, bouquet

manufacturers, and wholesalers. Executives involved in the failed mergers cited pricing

pressure from imports in the late 1990s, in light of already thin margins on floral products,

as one of the main reasons for the consolidations’ failure, in addition to the fact that the cut

flower industry is highly fragmented with different segments maintaining distinct inventory

management systems and business practices.30

Globalization in the Cut Flower Industry

Producers of cut flowers generally are not integrated with foreign firms. There is little direct

foreign ownership of U.S. cut flower firms, and few U.S. cut flower producers operate

abroad. One exception is a large U.S. multinational firm that recently acquired 790 hectares

of farms in cut flower production in Colombia, Ecuador, and Mexico. The company owns

its own aircraft service that transports flowers from locations in Latin America to its recently

constructed, 328,000-square-foot processing, warehousing, and shipping facility in Miami.

This producer serves as grower, importer, marketer, and distributor. The vertical integration

of its logistics and handling operations represent its effort to deliver uniform product quality

from the farm to its final customers.31 

Although this type of large-scale operation and investment is not typical in the industry,

many overseas producers in Latin America are focusing on establishing supply relationships

with U.S. mass merchandisers. Once these connections are established, the mass retail outlet

often takes an active role in the production decisions at the grower level. In a relationship

of this type, the grower produces to customer specifications, losing some control of his

operations; however, his product is guaranteed a venue for sale in the U.S. market where

demand is high. 
 32 Flower Promotion Organization fact sheet, ASOCOLFLORES, Association of Colombian

Flower Exporters, found at http://www.asocolflores.org/promo/Art%EDculo%20N%B01.pdf,

retrieved July 3, 2002.

 33 Delilah Onofrey, “Promotion Commotion,” Greenhouse Grower, Fall 1999.

 34 Stan Pohmer, “Mass Market Acceleration,” Greenhouse Grower, Fall 1999.

15

Marketing Methods

Cut flowers are promoted generically through industry associations and other voluntary

organizations. The Society of American Florists (SAF) administrates the Floral Marketing

Council (FMC), the largest voluntary public relations program for flowers and plants in the

United States. FMC receives contributions from all industry segments. Floral wire services,

such as Florists’ Transworld Delivery (FTD) and Teleflora, are networks of worldwide

florists who have agreed to exchange out-of-town flower orders placed by telephone or over

the Internet. These organizations also conduct national advertising campaigns. U.S. and

Colombian growers promote flowers in the United States market through the Flower

Promotion Organization, a voluntary arrangement they formed to boost short-term and

long-term demand for flowers.32 

A mandatory national marketing effort, similar in structure to national promotion orders for

other commodities, was developed in the mid-1990s, but was terminated shortly after its

institution. The grower-funded program, in which assessments of 0.5 percent of gross sales

were to generate $10-12 million for promotional activities, was formally organized in 1996.

USDA handled the administration and collection of the program until it lost the support of

the growers and was dismantled in 1997.33 

In some cases, dried and preserved flowers may be promoted and marketed along with fresh

cut flowers in a general “gift item” categoryHowever, customers do not generally perceive

fresh and preserved flowers to be substitutable due to the perishable nature of fresh flowers.

Floral decorations made of silk and other, synthetic, materials compete more directly with

preserved flowers. 

Retail marketing of fresh cut flowers has shifted from a large number of small, independent

retail florists to florist chains and mass market retailers with garden centers. The entrance of

mass merchandisers, or “big box” stores, to the distribution of fresh cut flowers, as well as

other garden products, has greatly influenced the change in marketing practices in the

industry. 

Mass merchandisers are typically discount clubs, home improvement chains, and

supermarkets. These stores are typically strategically located, aggressively advertised, and

have high customer traffic. Under the influence of mass merchandisers, the marketing of

fresh cut flowers has moved from a product and sales orientation to a customer-driven,

market-oriented approach. In turn, the concept of strict inventory management and tracking

of consumer sales (done through UPC labeling, data captured through point-of-sale registers,

and electronic data interchange), perfected by mass merchandisers, has begun to pervade the

rest of the retail flower industry; independent retailers and suppliers have begun to adopt

these technologies.34 As mentioned above, a key aspect of the mass merchandisers’ typical

business model, the notion that low prices move large quantities of merchandise, gives them

the ability to exert control over their suppliers. The “big box” stores also need suppliers with
 35 Debbie Hamrick, “Is Floriculture Recession-proof?” FloraCulture International, retrieved

from www.floricultureintl.com on Oct. 28, 2002.

 36 Nancy Laws, “World Commerce in Cut Flowers and Roses,” FloraCulture International,

retrieved from www.floricultureintl.com , on Oct. 31, 2002.

 37 Ibid.

 38 Thomas Weiler, “Cutting in on History,” Greenhouse Grower, Fall 1999.

16

sufficient production capabilities to satisfy their needs. This has contributed to consolidation

within the cut flower industry. 

Pricing Practices

Market prices for cut flowers are sensitive to demand as well as supply conditions.35

Although there has been some shift from retailer dependence on holiday promotions to yearround sales, prices for cut flowers tend to be high around certain holidays when demand

peaks. Supplies are determined by growers’ strategic planting and pinching schedules as well

as the weather. When peak production does not coincide with peak demand, prices fluctuate.

Certain physical characteristics, such as stem length, color, appearance, and freshness, are

also important in establishing prices for cut flowers.

The large purchasing power of mass merchandisers, as well as large importers and

distributors, is an important factor in the determination of cut flower prices. This, in addition

to low-priced imports, has kept fresh cut flower prices low.36 Smaller importers and U.S.

growers have seen their profit margins decrease significantly as a result. Large growers may

be able to maintain profits by negotiating volume discounts with their shippers and reducing

other costs. Their cost-cutting strategies may include the development of more productive

flower varieties by breeders, particularly in the 40- and 50- centimeter lengths destined for

the mass markets; increasing volume to reduce costs per stem; and introducing more efficient

management practices.37

Research and Development

Many concepts and technologies still used today in the cut flower industry were developed

in the 1950s and 1960s, such as artificial soil mixes, individual plug propagation (made

possible by the introduction of plastics), and mechanization in the greenhouse.38 More

recently, the industry has incorporated advances such as the use of sophisticated computers

for lighting and heating, better control of diseases, hydroponic (soilless) production,

improved transportation, and biotechnology. Advances in molecular biology help cut flower

growers understand how plant genes and chemical pathways in plants determine quality

characteristics. Breeders can patent this knowledge and recoup research and development

costs. 

Expenditures on research and development in the cut flower industry are carried out by

several organizations. Endowments have long provided private sources of funds for research

and educational programs. The American Floral Endowment allocates approximately
 39 American Floral Endowment website at www.endowment.org/contributions.htm, retrieved

Jan. 2003.

 40 “FIRST Cultivating Progress, “ retrieved at www.firstinfloriculture.org on Jan. 2003.

 41 “Customer Targeting,” American Floral Endowment, found at

http://www.endowment.org/specialreports/marketing.htm, retrieved Aug. 23, 2002.

 42 Ibid.

 43 Flora-Stats Annual Report, American Floral Endowment, 1999.

 44 Ibid.

17

$1 million annually for programs in floriculture and environmental horticulture.39 In 2000,

the Floriculture Industry Research and Scholarship Trust (FIRST) awarded more than

$150,000 in scholarships and research grants to improve the production and marketability

of flowers and plants.40 SAF’s American Florist Marketing Council also conducts research

and marketing promotions on fresh cut flowers. 

U.S. MARKET

Consumer Characteristics and Factors Affecting Demand

In the 1960s, cut flower consumers in the United States had little more to choose from than

chrysanthemums, gladioli, roses, and standard carnations. Today, with the elimination of

constraints on the ability to ship flowers and available transportation, there is an almost

unlimited variety of cut flowers available for purchase in the U.S. market. 

Most consumers make floral purchases at either a florist shop or supermarket.41 These two

channels support about three-fourths of all cut flower transactions. In the 1990s,

supermarkets and discount chains gained importance as retail outlets for cut flowers,

primarily due to price and convenience, as traditional floral shops lost sales.42 Purchases of

preserved floral products generally take place at discount chains and craft/hobby stores.

Consumers are increasingly making their fresh cut flower purchases online, and the vast

majority of these purchases are floral arrangements. Although Internet sales may represent

a relatively small share of total purchases, it is becoming an increasingly popular venue for

floral sales.43

Fresh cut flower consumption tends to be seasonal and peaks around certain holidays. Sales

also depend on consumer optimism and price. Industry research on cut flower buying

practices has shown that a “heavy buyer” (repeat customer) of fresh cut flowers tends to be

middle-aged, and most likely an “empty-nester” whose children have left home to start their

own families. Heavy buyers generally come from affluent households and are most likely

to be found in the New England and Mid-Atlantic regions of the Eastern United States, and

the Mountain and Pacific regions of the West. More than 50 percent of floral product

purchases are for gifts.44
 45 “Consumer Tracking Study,” Flora-Stats Annual Reports, 1993-1999. American Floral

Endowment, www.endowment.org/florastats, retrieved Sept. 2002.

 46 Debbie Hamrick, “Is Floriculture Recession-proof?” FloraCulture International, Apr. 2002

 47 USDA, ERS, Floriculture and Nursery Crops Situation and Outlook Yearbook, FLO-2002,

May 2002.

18

Consumption

In 2001 apparent consumption of cut flowers was estimated to be $950 million, representing

a decline of 6.6 percent from the level in 1997. U.S. production decreased by 10 percent over

the period. Exports similarly declined by 19 percent. U.S. imports remained relatively stable

throughout the period, rising slightly (by 3 percent) between 1997-1998 and 1999-2000 and

ending the period down by 5 percent from the 1997 level (table 2).

Table 2

Cut flowers: U.S. production, exports of domestic merchandise, imports for consumption, and

apparent consumption, 1997-2001

Year U.S. production1 U.S. exports U.S. imports

Apparent U.S.

consumption

Ratio of imports

to apparent

consumption

––––––––––––––––– Value (1,000 dollars) ––––––––––––––––– Percent

1997 ................... 471,569 48,753 595,045 1,017,861 58.5

1998 ................... 411,595 44,553 614,362 981,404 62.6

1999 ................... 431,624 41,354 591,593 981,863 60.3

2000 ................... 429,963 39,500 611,255 1,001,718 61.0

2001 ................... 424,256 39,434 565,471 950,293 59.5 1

 Production of fresh cut flowers. Data for preserved are not available.

Source: Production compiled from official statistics of the U.S. Department of Agriculture; exports and imports

compiled from official statistics of the U.S. Department of Commerce.

Strong economic indicators in the United States in the first half of the 1990s, marked by

steady growth of GDP, low unemployment, low inflation, increasing wages, and general

optimism relating to the stock market, kept cut flower sales steady and prices relatively

strong.45 Since cut flower purchasing is discretionary and tends to be tied to the economy,

consumer confidence had a positive influence on cut flower sales.46 As economic activity

slowed starting in 2000, U.S. consumers cut back on their purchases of floral products,

especially green plants, cut flowers, and preserved products. Data show that apparent

consumption remained steady from 1997-2000 at about $1 billion, then dropped by about

$50 million in 2001 (table 2).

The ratio of imports to apparent consumption remained relatively steady between 1997 and

2001 ranging from 59 percent to 63 percent. The main sources for imports during the period

were Colombia, Ecuador, and the Netherlands. Imported flowers are considered to be of high

quality. Prices on high volume imports, especially roses and chrysanthemums, are generally

more cost competitive than domestic products due to low wage rates, smaller climate-control

investments, and weaker currencies in Colombia and Ecuador, the chief U.S. suppliers.47
 48 USDA, ERS, Floriculture and Nursery Crops Outlook, Sept. 2002. 

 49 USDA altered its Ornamental Crops data set significantly in 1999 and 2001. In 2001 USDA

created a category for all roses and six new product categories that had previously been reported

under “other flowers.” No comparative information is available for additional individual flower

types for the entire 5-year period.

19

Production

In the last two decades, production of certain cut flowers for the U.S. market has moved

overseas. Sales by U.S. fresh cut flower growers, except in Western States, have fallen to

about one-half their 1992 levels, with the prices of imports falling at a much faster rate.

Current prices of domestically grown cut flowers are only 2 percent higher than they were

in the early 1990s (less than general consumer price inflation)Prices of imports, however,

have dropped by 36 percent over the same period. This has left current overall prices of fresh

cut flowers in the U.S. market 15 percent below their levels in 1995.48

In the face of increasing low-priced import competition, many U.S. growers have shifted

production into specialty cut flowers (which generally refers to flowers other than carnations,

chrysanthemums, gladioli, or roses), which are not imported in significant volumes, and also

into other floriculture crops such as bedding and garden plants, which are not covered in this

summary. Some U.S. growers have differentiated their product to some extent by offering

services not available from importers, such as quick turnaround times on special orders.

Table 3 shows data on U.S. production, by type, for the last 5 years. During the period, the

value of U.S. production of fresh cut flowers overall decreased by nearly 10 percent. Roses

had the most dramatic decrease, falling by almost half. Between 2000 and 2001, decreases

were recorded for the value of U.S. production of all flower types, including “other cut

flowers,” with the exception of lilies and lisianthus.49

U.S. TRADE

Overview

The United States maintains a trade deficit in cut flowers with the vast majority of its trading

partners with the exception of Canada. The U.S. trade surplus with Canada increased by

42 percent between 1997 and 2001 (table 4)The overall U.S. deficit narrowed between 1997

and 2001, falling from $546 million to $526 million, primarily due to the decrease in value,

although not necessarily volume, of imports. The United States is a net importer of flowers

because its foreign competition has a competitive advantage in terms of the costs of labor,

land and environmental protections.
20

Table 3

Fresh cut flowers: U.S. production, by major flower types, 1997-2001

Flower type 1997 1998 1999 2000 2001

–––––––––––––––– Value (1,000 dollars) ––––––––––––––––

Roses1

 ................................ 122,515 102,365 87,003 69,294 67,656

Lilies .................................. (2

) (2) (2) 55,975 57,452

Tulips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2

) (2) (2) 26,760 26,265

Gladioli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,861 33,138 25,535 28,339 24,183

Iris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2

) (2) (2) 20,395 20,117

Gerbera daisy . . . . . . . . . . . . . . . . . . . . . . . . . . . (2

) (2) (2) 20,886 20,045

Snapdragons ........................... (2

) (2) (2) 19,166 17,249

Pompon chrysanthemums . . . . . . . . . . . . . . . . . 16,341 16,828 15,181 17,214 16,578

Delphinium and larkspur . . . . . . . . . . . . . . . . . . (2

) (2) (2) 10,955 10,807

Lisianthus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2

) (2) (2) 6,891 10,101

Other cut flowers 3

 ....................... 297,852 259,264 303,905 154,088 153,803

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471,569 411,595 431,624 429,963 424,256 1 Data for 1997-1999 were collected for two categories of roses only: hybrid tea and sweetheart; 2000 and 2001

data were collected for “all roses”. 2

 Data were not collected separately for this category during 1997-1999; production was included in “other cut

flowers.” 3

 Data for 1997-1999 are not comparable with 2000-2001; 2000 and 2001 data collection excluded additional

individual flower breakouts which had formerly been in this category.

Note.—Data are for production in 36 major producing States and represent only growers with sales of $100,000 or

more.

Source: Compiled from official statistics of the U.S. Department of Agriculture.
21

Table 4

Cut flowers: U.S. exports of domestic merchandise, imports for consumption, and merchandise trade

balance, by selected countries, 1997-20011

 

1997 1998 1999 2000 2001

–––––––––––––– Value (1,000 dollars) –––––––––––––––

U.S. exports of domestic merchandise:

Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 461 247 205 72

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 213 183 0 331

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,426 1,061 487 422 217

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,515 7,145 5,830 4,659 3,113

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,174 24,805 26,252 27,969 29,757

Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 20 26 12 7

Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 8 58 0 0

Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 71 36 4 0

Guatemala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 129 0 6 12

New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 18 16 6 0

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,301 10,620 8,219 6,218 5,924

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,753 44,553 41,354 39,500 39,434

U.S. imports for consumption:

Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,620 360,626 343,127 347,912 302,412

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,497 90,119 92,174 89,350 99,745

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,774 69,200 61,629 71,628 67,097

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,649 25,186 27,200 29,633 29,421

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,871 15,554 15,434 17,816 17,953

Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,974 18,993 19,378 19,429 14,705

Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,832 4,468 4,345 5,818 6,891

Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,402 2,321 3,024 2,920 3,396

Guatemala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,998 7,397 5,621 5,506 3,373

New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,668 2,078 2,261 2,420 3,165

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,760 18,421 17,400 18,824 17,312

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595,045 614,362 591,593 611,255 565,471

U.S. merchandise trade balance:

Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -359,462 -360,165 -342,881 -347,707 -302,340

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -83,493 -89,906 -91,991 -89,350 -99,414

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -56,348 -68,139 -61,142 -71,206 -66,879

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14,134 -18,042 -21,370 -24,974 -26,308

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,302 9,252 10,818 10,154 11,804

Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17,971 -18,972 -19,353 -19,417 -14,698

Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,729 -4,459 -4,287 -5,818 -6,891

Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,366 -2,249 -2,988 -2,916 -3,396

Guatemala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7,969 -7,268 -5,621 -5,500 -3,361

New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,665 -2,060 -2,245 -2,414 -3,165

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8,459 -7,801 -9,181 -12,606 -11,388

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -546,293 -569,809 -550,239 -571,754 -526,037 1

 Import values are based on customs value; export values are based on f.a.s. value, U.S. port of export.

Source: Compiled from official statistics of the U.S. Department of Commerce.

U.S. Imports

Virtually no fresh cut flowers were imported into the United States prior to 1960. At that

time, it was difficult to transport perishable products such as flowers over long distances and

large-scale production of cut flowers largely was limited to the United States and Europe.

In the mid-1960s researchers at Colorado State University identified Bogota, Colombia, as

the ideal place in the Western Hemisphere to cultivate standard carnations due to excellent

year-round growing conditions, favorable wage rates, and relatively low investment costs.

At about the same time, first generation jet aircraft such as the Boeing 727 were becoming

too inefficient for use in passenger travel and their freight rates were reduced for use as cargo
 50 Win Winogrond, “Cut Flowers on the Move,” Greenhouse Grower, Fall 1999.

 51 “The Changing Floriculture Industry,” Society of American Florists, June 2001.

 52 USDA, Ornamental Crops Report, Fruit and Vegetable Market News, Jan. 2002. USDA data

on floral import volumes are not comparable to data compiled by the U.S. Department of

Commerce. USDA Ornamental Crops data show a 12.5 percent increase in floral import volume

from 2000 to 2001 (3.78 billion stems in 2001 up from 3.36 billion in 2000).

 53 USDA, ERS, Market and Trade Economics Division, Floriculture and Nursery Crops

Situation and Outlook Yearbook, FLO-2002, May 2002.

22

planes. These factors, along with the cooperation of the local government in Bogota, led to

the development of the export-oriented cut flower industry in Colombia.50 Similarly,

governments in Africa, Asia, and other Latin American countries have encouraged flower

industries in their countries as a mechanism to employ large numbers of semiskilled workers

and to attract U.S. dollars to their economies.51 By the early 1980s, offshore cut flower

production began to overtake U.S. domestic production, particularly of chrysanthemums,

carnations, and roses. Greater supplies of cut flowers at ever lower prices also had the effect

of increasing the overall demand for cut flowers in the U.S. market.

Import Levels and Principal Suppliers

As shown in table 5, imports of fresh cut flowers decreased irregularly between 1997 and

2001, but stayed in the range of $550-$600 million (table 5). Although import value fell

between 2000 and 2001, the volume of fresh cut flower imports actually increased, albeit at

reduced prices, due to high levels of global production.52 The U.S. economy was generally

sluggish in 2001, causing the sales value of fresh cut flowers in the United States to stagnate,

reflecting demand sensitivity to increased unemployment and weak economic activity.53 

Table 5

Fresh cut flowers: U.S. imports for consumption, by principal sources, 1997-2001

Source 1997 1998 1999 2000 2001

––––––––––––– Value (1,000 dollars) –––––––––––––

Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,584 360,576 342,755 347,749 302,321

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,378 89,967 91,900 89,216 99,554

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,762 66,327 59,495 70,503 66,633

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,479 17,901 18,437 21,618 21,056

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,156 14,928 14,935 16,949 17,549

Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,963 18,946 19,284 19,392 14,695

Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,329 3,081 3,040 4,730 6,088

Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,402 2,247 3,003 2,881 3,396

Guatemala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,951 7,316 5,576 5,458 3,320

New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,633 2,056 2,243 2,420 3,165

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,575 15,558 13,547 14,614 13,405

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 579,212 598,903 574,215 595,530 551,182

Note.— Because of rounding, figures may not add to the totals shown.

Source: Compiled from official statistics of the U.S. Department of Commerce.
 54 Staff interview with Jim Wanko, President, Wholesale Florist and Florist Supplier

Association, June 25, 2002.

 55 As beneficiaries of the Andean Trade Preferences Act, these countries’ imports of cut

flowers are entitled to preferential rates of duty. See “U.S. Trade Measures” below.

 56 United Nations Statistical Office, Comtrade Data Base System.

23

The main sources for imports during the period were Colombia, Ecuador, and the

Netherlands. Imports from Colombia are valued at over three times those of the next largest

importing country, Ecuador. The value of imports from Colombia decreased significantly

between 1997-2001, by 16 percent, while imports from Ecuador rose by 19 percent, with the

most significant increase between 2000 and 2001 when Ecuadorian growers began to market

roses aggressively in the U.S. market.54 Imports from the Netherlands increased irregularly,

ending the period 13 percent above the level in 1997. U.S. imports of preserved flowers have

decreased irregularly since 1997, falling by 10 percent during the period (table 6). The major

supplier to the U.S. market is Mexico, accounting for more than one-half of the value of

imports. China has also become an increasingly important supplier of preserved flowers. 

Table 6

Preserved flowers: U.S. imports for consumption, by principal sources, 1997-2001

Source 1997 1998 1999 2000 2001

––––––––––––– Value (1,000 dollars) –––––––––––––

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,170 7,286 8,763 8,015 8,365

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355 677 1,695 1,411 1,348

Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 0 3 649 845

Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,503 1,386 1,305 1,088 804

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,124 815 635 670 799

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,013 2,873 2,134 1,125 463

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 716 626 499 867 404

France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 216 378 441 207

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 151 274 134 191

South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 211 180 191 146

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,324 1,217 1,511 1,134 718

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,833 15,459 17,378 15,724 14,289

Note.—Because of rounding, figures may not add to the totals shown.

Source: Compiled from official statistics of the U.S. Department of Commerce.

Fresh cut flowers are a major nontraditional agricultural export product for both Colombia

and Ecuador. Ecuador, like Colombia, enjoys year-round production and benefits from

abundant water, labor, and quality land. The United States is the principal fresh-cut flower

export market for both these Andean countries,55 accounting for 82 percent of the total value

of Colombian cut flower exports ($580.7 million) and 72 percent of Ecuadorian cut flower

exports ($154.7 million) in 2000.56

The most important imported flower, in terms of value, is the rose, accounting for 36 percent

of all cut flower imports in 2001 (table 7). Carnations (both standard and miniature) are the

second-most- imported flower, followed by pompon chrysanthemums. 
24

Table 7

Cut flowers: U.S. imports for consumption, by major types, 1997-2001

Flower type 1997 1998 1999 2000 2001

–––––––––––––––– Value (1,000 dollars) –––––––––––––––

Pompon chrysanthemums . . . . . . . . . . . . . . . . . . 66,732 73,023 67,298 61,940 50,622

Standard carnations . . . . . . . . . . . . . . . . . . . . . . . 79,504 74,559 70,597 57,111 44,810

Miniature carnations . . . . . . . . . . . . . . . . . . . . . . . 37,751 38,740 41,058 34,153 26,526

Alstroemeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1

) (1) 26,738 19,367 23,645

Gypsophila . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1

) (1) 22,206 21,037 21,867

Preserved flowers . . . . . . . . . . . . . . . . . . . . . . . . . 15,833 15,459 17,378 15,724 14,289

Spray roses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1

) (1) 4,027 5,406 5,798

Sweetheart roses . . . . . . . . . . . . . . . . . . . . . . . . . 1,375 1,565 1,933 1,309 942

Other roses 2 ............................. 205,220 215,951 194,886 206,286 198,955

Other fresh cut flowers . . . . . . . . . . . . . . . . . . . . . 188,632 195,064 145,471 188,920 178,016

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595,045 614,362 591,593 611,255 565,471 1

 Category not broken out prior to 1999.

2

 1997 and 1998 data includes spray roses; 1999-2001 data do not include spray roses.

Source: Compiled from official statistics of the U.S. Department of Commerce.

Logistics

Flowers imported from overseas remain fresh by employing a “cold-chain” of distribution,

meaning the product is shipped in an unbroken refrigerated chain from grower to importer

to floral wholesaler to retailer, providing the flowers with controlled temperature, humidity,

and atmospheric conditions. Flowers generally arrive by air from overseas producers and are

unloaded from airline cargo holds to refrigerated cooling facilities on the airport premises.

Once inspected by USDA and released by U.S. Customs, they travel to importers’ facilities

where they are re-cooled. Cold air is drawn through the shipping cartons to remove warm

air that accumulates inside due to the flowers own respiration and outside temperature

changes. The temperature of the flowers is brought down to hibernation level ranging from

32 to 38 degrees Fahrenheit. The flowers are then sorted and loaded onto refrigerated trucks

or air carriers for transport to final destinations. 

U.S. Trade Measures

Tariff Measures 

Table 8 shows the column 1 rates of duty, as of January 1, 2002, for the articles included in

this summary (including both general and special rates of duty) and U.S. exports and imports

for 2001. An explanation of tariff and trade agreement terms is shown in appendix A. The

aggregate trade-weighted average rate of duty for all products covered in this summary,

based on 2001 imports and 2001 duty rates, was 1.1 percent ad valorem; the average tradeweighted rate of duty for the dutiable products was 6.3 percent.
25

Table 8Cut flowers: Harmonized Tariff Schedule subheading; description; U.S. col. 1 rate of duty as of Jan. 1, 2002; U.S. eximports, 2001HTSsubheadings Description

Col. 1 rate of duty as of Jan. 1, 2002 

General Special 1 

Cut flowers and flower buds of a kind suitable forbouquets or for ornamental purposes, fresh, dried,dyed, bleached, impregnated or otherwise prepared:

Fresh:

0603.10.30 Miniature (spray) carnations . . . . . . . . . . . . . . . . . . 3.2% Free (A,CA,E,IL,J,JO,MX) 

0603.10.60 Roses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8% Free (CA,D,E,IL,J,JO,MX) 

0603.10.70 Chrysanthemums, standard carnations,

anthuriums and orchids . . . . . . . . . . . . . . . . . . 6.4%

Free (A*,CA,E,IL,J,JO,MX) 

0603.10.80 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4% Free (A,CA,E,IL,J,JO,MX) 0603.90.00 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4% Free (A,CA,E,IL,J,JO,MX) 

1 Programs under which special tariff treatment may be provided, and the corresponding symbols for such programs as they are indicated in the “Special” 

Generalized System of Preferences (A); Generalized System of Preferences with the exception of Colombia (A*); North American Free Trade Act (goods o

and Opportunity Act (D); Caribbean Basin Economic Recovery Act (E); United States-Israel Free Trade Act (IL); the Andean Trade Preferences Act (J); UnArea Implementation Act (JO); North American Free Trade Agreement (goods of Mexico) (MX).

2 Separate export data are not available on an 8-digit level; data reflect all exports of the 6-digit subheading 060310.
 57 ATPA was signed into law in December 1991, and renewed in 2002, eliminating or reducing

U.S. tariffs on eligible products, including cut flowers, from four Andean countries for the

purpose of promoting broad-based economic development in those countries and to develop

viable economic alternatives to coca cultivation and cocaine production by offering enhanced

access to the U.S. market for Andean products.

 58 Both Colombia and Ecuador are GSP beneficiary countries, however, roses are not included

in the GSP program and chrysanthemums are not duty-free under the GSP for Colombia due to

the competitive-need-limit requirement. For duty-free treatment, Colombian exporters can ship

both roses and chrysanthemums under ATPA only, while Ecuadorian exporters can ship roses

under ATPA and chrysanthemums under the ATPA or GSP programs.

 59 The AGOA was signed into law in May 2000, to increase the level of trade and investment

between Sub-Saharan Africa and the United States.

 60 One of the most serious diseases that can be introduced on imported flowers is

Chrysanthemum white rust. For this reason, chrysanthemums from Mexico and the Netherlands

must be accompanied by a phytosanitary certificate and chrysanthemums from Venezuela are

prohibited in the United States.

26

Almost 85 percent of total U.S. imports of cut flowers in 2001 entered duty-free under

preferential trade programs. More than three-quarters of those imports entered under the

Andean Trade Preferences Act (ATPA) that benefits Bolivia, Colombia, Ecuador, and Peru.57

Imports from Colombia and Ecuador accounted for the vast majority of imports under that

program.58 The second-most-important program with regards to cut flowers is NAFTA;

imports from Canada and Mexico combined accounted for almost 10 percent of duty-free

cut flower imports in 2001. Small amounts of cut flowers enter under Caribbean Basin

Economic Recovery Act (CBERA) (mostly from Costa Rica) and the Generalized System

of Preferences (GSP) (mostly from Chile). Israel is a significant world supplier of cut flowers

and shipped $6.8 million to the United States in 2001 duty-free under the U.S.-Israel Free

Trade Area. Duty-free imports of roses under the African Growth and Opportunity Act

(AGOA)59 program are currently low; however, Kenya is now the leading supplier of roses

to Europe and began to ship to the U.S. market under AGOA for the first time in 2001.

Nontariff Measures

Phytosanitary regulations are the only nontariff measure that affects trade in cut flowers. All

imported fresh cut flowers are subject to quarantine inspection by the Animal and Plant

Health Inspection Service (APHIS) of the U.S. Department of Agriculture to prevent the

spread of injurious plant pests. Most cut flowers do not require a permit, although a

certificate of inspection from the country of origin is required for some species.60 Generally

inspectors require that one box of each variety from each grower within a shipment be

opened. The inspectors remove the flowers and examine them for any restricted plant pests.

Cut flowers found to have any injurious pests are subject to seizure and must be destroyed

if they cannot be effectively treated. Such plant material may also be re-exported. 
 61 64 FR 28975, May 28, 1999 and 64 FR 48346 and 48347, Sept. 3, 1999. 

27

U.S. Government Trade-Related Investigations

Fresh cut flowers, mainly from South America, were the subject of a number of antidumping

and countervailing duty investigations during the 1980s and early 1990s. However, the

relationship between U.S. and Colombian cut flower producers underwent a significant

change in the late 1990s. In 1999, long-standing antidumping duty orders on fresh-cut

flowers from Colombia and Ecuador, and a countervailing duty order on pompon

chrysanthemums from Peru were revoked as a result of the withdrawal of participation in the

proceedings by U.S. domestic interested parties.61 That same year, U.S. and Colombian cut

flower growers and importers reached an arrangement to increase sales of all cut flowers in

the United States through the Flower Promotion Organization. 

U.S. Exports

Principal Markets and Export Levels

The United States exports cut flowers mainly to Canada, Mexico, the EU, and Japan. U.S.

exports of fresh cut flowers fell 5 percent between 1997 and 2001; small but steady increases

in exports to Canada offset drops to the Netherlands and Germany during that time (table 9).

Exports of preserved flowers showed a steady decline, decreasing 49 percent between 1997

and 2001 (table 10). This was mainly due to the drop in exports of preserved flowers to the

principal export market, Mexico. U.S. exports of cut flowers represent a small portion of

total U.S. production value as they face intense price competition from low-cost suppliers

to the world market.

Table 9

Fresh cut flowers: U.S. exports of domestic merchandise, by principal markets, 1997-2001

Market 1997 1998 1999 2000 2001

–––––––––––––––– Value (1,000 dollars) ––––––––––––––––

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,520 21,803 23,653 25,172 27,193

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,072 2,693 2,680 2,607 2,740

Ecuador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 209 180 0 331

Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 327 0 0 197

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . 69 130 280 506 177

Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,118 534 321 141 132

Bahamas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 33 48 48 121

Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,806 3,435 1,757 238 120

All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,043 1,548 1,048 572 264

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,780 30,713 29,966 29,285 31,274

Source: Compiled from official statistics of the U.S. Department of Commerce.
 62 United Nations Statistical Office, Comtrade Data Base System.

 63 Imports of fresh cut flowers enter the EU with a 12-percent duty from June through October;

they are charged an 8.5-percent duty during the rest of the year. Cut flowers from African,

Caribbean, and Pacific countries receive duty-free treatment into the EU under the Cotonou

agreement.

 64 EU Directive 2000/29/EC had previously required disease-free certification only for cut

dianthus, chrysanthemum, and orchid imports. Several amendments to that directive, which will

take effect in Apr. 2003, expand the requirement to cover all types of cut flowers. 

 65 USDA/FAS, Canadian Market Brief: Flowers, Plants, Nursery Products, Apr. 1998.

 66 Global Trade Atlas database for Canada.

28

Table 10

Preserved flowers: U.S. exports of domestic merchandise, by principal markets, 1997-2001

Market 1997 1998 1999 2000 2001

––––––––––––––– Value (1,000 dollars) –––––––––––––––

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,397 6,946 5,656 4,651 3,098

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,654 3,002 2,599 2,797 2,564

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 442 628 272 554

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619 604 458 490 413

France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 48 124 0 287

Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 211 217 192 244

Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 67 160 61 199

Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 260 237 104 175

All others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,403 2,261 1,308 1,648 626

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,973 13,840 11,387 10,216 8,160

Source: Compiled from official statistics of the U.S. Department of Commerce.

Foreign Trade Tariff and Nontariff Measures

The world’s largest importers of cut flowers are the United States, the EU (mainly Germany,

the United Kingdom, the Netherlands, and France), and Japan.62 The EU imposes a tariff of

8.5 percent or 12 percent ad valorem on fresh cut flower imports and 10 percent on imports

of preserved flowers.63 Recent changes to phytosanitary regulations for cut flower and plant

imports into the EU require certificates to accompany all cut flowers declaring the products

free from the relevant quarantine organisms.64 Imports of all types of cut flowers into Japan

are duty free for all countries; however, cut flowers are subject to plant quarantine

regulations. U.S. exports of fresh and preserved cut flowers enter Canada duty free under

NAFTA. U.S. exporters normally supply over 90 percent of the Canadian import market for

roses.65 U.S. exports captured 13 percent of the Canadian cut flower market for imports in

2001, following Colombia and Ecuador.66 U.S. exports of cut flowers to Canada do not

require an import permit or a phytosanitary certificate.
 67 More than two-thirds of the international trade in flowers takes place within Europe.

 68 United Nations Statistical Office, Comtrade Data Base System and Laws, Nancy, “World

commerce in cut flowers and roses,” FloraCulture International, Oct. 31, 2002.

 69 Association of Dutch Flower Auctions (Vereniging van Bloemenveilingen in Nederland).

 70 K.V. Peter, “Cut flower market to touch $35 billion,” Asia Intelligence Wire, Sept. 3, 1999.

29

FOREIGN INDUSTRY PROFILE

Global Trade and Market Conditions

Although data are not available for world production, the major cut flower producing

countries are believed to be the Netherlands, Colombia, and the United States. The main

exporting countries are the Netherlands, Colombia, Ecuador, and Israel. Data on world

imports of cut flowers indicate the magnitude of the world market, which reached

$3.7 billion in 2000. A country’s cut flower consumption growth tends to depend on its

economic development. The data bears this out, revealing that the world’s most wealthy

countries consume the most cut flowers. Per capita consumption of cut flowers is highest in

Europe, the United States, and Japan. Germany is the largest importer worldwide, receiving

about 20 percent of world trade in 2000. The United States imports just slightly less than

Germany. The Netherlands is also a large importer, due to the presence of large flower

auctions, but it re-exports most of its imports to other countries within the EU.67 The United

Kingdom and Japan are also significant importers. Roses and carnations are the most traded

flower types throughout the world. 

Prior to the 1970s, the vast majority of world cut flower consumption was supplied by local

production. At that time, any international trade in cut flowers was primarily limited to cross

border trade. The expanded use of commercial jet aircraft, the establishment of frequent and

reliable transoceanic airline service, and the development of sophisticated receiving,

handling, and shipping facilities in many countries has allowed for a world market in fresh

cut flowers. 

Today, the importance of domestic production is generally declining while global imports

are increasing. In the 1970s and 1980s, demand for some cut flowers exceeded supply in the

world market. At that time, countries in Latin America and Africa ramped up production and

created efficient export operations. In the 1990s, worldwide production continued to rise

while demand in key markets stabilized or increased only marginally, making trading

extremely competitive in most markets. With world production of cut flowers, particularly

roses, outpacing demand, average prices fell. Data show that world imports of cut flowers

decreased in value by 5 percent between 1997 and 2000 (the most recent year for which data

is available), yet at the same time traded volumes increased.68

Netherlands

Cut flower production in the Netherlands was valued at $1.8 billion in 2000.69 Production

took place on 8,000 hectares mainly in the Westland region of western Netherlands.70 More
 71 Ibid.

 72 Dutch Product Board for Horticulture, “Dutch Horticulture in Facts and Figures, 2000.”

 73 Peter J. Batt, “Strategic Lessons to Emerge from an Analysis of Selected Flower Export

Nations,” Journal of International Food and Agribusiness Marketing, Vol. 11, Nov. 3, 2000.

 74 Ibid.

 75 This figure includes Dutch exports of imported product.

 76 Dutch Ministry of Agriculture, Nature Management and Fisheries, “The Dutch Floriculture

Sector,” Oct. 2000.

 77 Dutch Product Board for Horticulture, “Dutch Horticulture in Facts and Figures, 2000.”

 78 Joanne McIntyre, “Vast European market set to dominate world trade,” Flowertech, Vol. 2,

No. 4, 1999.

 79 Peter J. Batt, “Strategic Lessons to Emerge from an Analysis of Selected Flower Export

Nations,” Journal of International Food and Agribusiness Marketing, Vol. 11, No. 3, 2000.

30

than 60 percent of production takes place in greenhouses.71 Increased competition from lowpriced imports has led to consolidation within the industry, resulting in larger farms which

can take advantage of economies of scale to increase productivity. The cultivation of flowers

and plants accounts for only about 4 percent of horticultural land use in the Netherlands, but

it generates about one-half of its production value.72 The main flower crops are roses, tulips,

chrysanthemums, freesias, and gerberas. Dutch producers benefit from fertile soils and a cool

and temperate climate, as well as an abundant supply of natural gas to heat their

greenhouses.73

The Dutch have been growing flowers and plants commercially since the early 1800s. Most

growers do not sell their products directly to end users, but are affiliated with the Dutch

flower auction system. This system, in place since the early 1900s, serves as a type of

growers’ co-operative. Once a member of the auction, a grower is obligated to sell all his

production there. More than 90 percent of Dutch production, as well as many imports, is sold

through the auction system. Today about 15 percent of flowers at the Dutch auctions consist

of imports, mostly from Kenya, Colombia, and Israel.74 Electronic auction sales are

becoming increasingly important. Regardless of the form the auction sales take, the auction

system is where prices are determined and where the distribution of flowers to both domestic

and export markets is organized.

The Netherlands is by far the largest exporter of cut flowers in the world. Dutch exports

reached $2.1 billion in 2000, the vast majority of which went to neighboring countries within

the European Union, especially Germany, the United Kingdom, and France.75 Almost

75 percent of all Dutch production is exported.76 The Dutch accounted for 58 percent of the

international cut flower market and 85 percent of the market in the European Union in

2000.77 Although the Netherlands has more expensive raw materials and labor costs and a

less favorable climate for most of the year relative to developing country producers, the

Dutch industry is able to remain competitive due to its high productivity, efficiency, and

innovation.78 The Netherlands’ success in floriculture can also be attributed to the use of

capital intensive technical applications, high quality propagation material, and a highly

trained workforce.79
 80 Based on the fact that 95 percent of Colombian production is exported. Association of

Colombian Flower Growers (ASCOLFLORES). Presentation to the 53rd Congress of International

Association of Horticultural Producers, Bogota, Colombia, Oct. 2001.

 81 Association of Colombian Flower Growers (ASCOLFLORES).

 82 Based on the fact that 90 percent of Ecuadorian production is exported. USDA, U.S. Foreign

Agricultural Services, “World Horticultural Trade and U.S. Export Opportunities,” Oct. 1996.

 83 EXPOFLORES, Ecuadorian Flower Growers and Exporters Association, “La Flor de

Ecuador,” Mar. 1999.

 84 “Ecuador assails cuts in U.S. aid,” Los Angeles Times, June 26, 2002.

31

Colombia

Colombia’s fresh cut flower production was valued at approximately $642 million in 2001.80

Fresh cut flowers were produced on 5,630 hectares in 2001 on more than 500 farms. Most

of Colombia’s fresh cut flower production is located around Bogota, with small production

areas in the Rionegro and Antioquia regions around Medellin and Cali. Roses, standard and

miniature carnations, and chrysanthemums account for almost 80 percent of Colombian

production and exports. Colombia has ideal growing conditions for cut flowers, abundant

labor and land, and high light levels, giving it a production cost advantage over U.S.

producers. Relatively low investment costs and a cooperative local government have

contributed to the flourishing of Colombia’s cut flower industry. 

Colombia was the second largest exporter in the world in 2001 and exported about

95 percent of its cut flower production, primarily to the United States and the EU. The

Colombian cut flower industry was developed in the late 1960s specifically as an export

business, replacing traditional small-scale agricultural production. In 2001, Colombian

producers exported more than $610 million worth of flowers. The United States was the

destination for about 80 percent of Colombian exports during the period 1997-2001. The EU

was the destination for about 12 percent of Colombia’s exports. Flowers destined for the

United States are transported in 35,000 boxes on 20 daily flights into Miami International

Airport. The industry employs approximately 79,000 people directly involved in production

and another 75,000 indirectly in shipping, packaging, and other services. The largest cost

component of production is labor, representing 30 percent of the cost of the final product.

Cut flowers accounted for 5 percent of the value of total Colombian exports and contributed

3 percent to the Colombian gross domestic product in 2001.81

Ecuador

Ecuador’s fresh cut flower production was valued at approximately $280 million in 2001.82

In 1998 (the last year for which data are available), fresh cut flowers were produced on 2,700

hectares on 264 farms with 50,000 people involved in direct production operations.83

Ecuador has ideal weather conditions for flower growing due to its situation on the equator

and 12 hours of sunlight year-round. Roses accounted for over one-half of Ecuador’s cut

flower production.

Exports of fresh cut flowers in 2001 reached $250 million.84 Traditionally over 90 percent

of the country’s total cut flower production is exported, mostly to the United States but also

to the Netherlands and Russia. In recent years, Ecuadorian producers have lost important

markets in Eastern Europe and have increased exports to the United States. Although
 85 A rose bush may be commercially productive for 6-8 years. Many Colombian growers are

working off of existing bushes and offering the same varieties as in previous years.

 86 Communication with Tal Darcherits, Flower Board Israel.

 87 Peter J. Batt, “Strategic Lessons to Emerge from an Analysis of Selected Flower Export

Nations,” Journal of International Food and Agribusiness Marketing, Vol. 11, No. 3, 2000.

 88 In drip irrigation, water is applied directly to the root of the plant using 1/16 of the water of

traditional irrigation methods.

 89 Marie-Francoise Petitjean, “Booming floriculture in Africa,” Floriculture International, June

2002.

 90 Ibid.

 91 “Rosey future for Kenya flowers,” African Business, Mar. 2002.

32

Colombia dominates the U.S. market for imports, Ecuadorian producers have recently made

significant investments in production facilities, specifically newer plantings of rose bushes,

and are therefore able to offer different varieties than their competition85Ecuadorian

exporters ramped up exports to the U.S. market in 2001. Ecuador has a slight disadvantage

relative to Colombia in terms of freight rates; however, Ecuador benefits from lower labor

costs relative to Colombia.

Israel

Israeli flower production, which takes place on approximately 2,100 hectares, has been

estimated to be worth $185 million in 2001.86 As in many cut flower producing countries,

the area dedicated to cut flower production has been increasing. However, the number of

growers is declining and average property sizes are increasing.87 The main flower types

produced are roses and carnations. Most production (about 70 percent) takes place under

protective polyvinyl structures to counteract high daytime temperatures, humidity, and low

overnight temperatures. Specialized drip irrigation was developed in Israel in the 1950s as

a way to deal with the water shortage that affects all sectors of Israeli agriculture.88 Technical

efficiencies, low labor-wage costs, and temperatures generally favorable for plant growth

sustain the Israeli floriculture sector.

In 2001, Israel was the fourth-largest exporter of cut flowers in the world, with exports

valued at $130 million. The EU is the principal destination for Israeli cut flowers and, in

2001, Israeli imports accounted for 16 percent of the import market for cut flowers in the

EU. Israel faces increased competition in supplying Europe with flowers as African countries

develop more efficient export operations. 

Eastern and Southern Africa: Kenya, South Africa, Zimbabwe

In Eastern and Southern Africa approximately 1,400 growers cultivated 5,500 hectares of

flowers and exported approximately 80,000 tons of cut flowers in 2001.89 In the late 1990s,

the floriculture sector grew at an average rate of 10 to 15 percent per year.90 This

development has come as a result of improved logistics, flower quality, and postharvest

handling conditions. In addition, several of the key producing countries have been successful

in meeting internationally recognized standards of practice regarding safety, wage rates,

environmental awareness, and water management.91 Africa benefits from competitive 
 92 Marie-Francoise Petitjean, “Booming floriculture in Africa,” Floriculture International,

June 2002, p. 20.

 93 USDA, Foreign Agricultural Service, GAIN Report, “Kenyan Horticultural Situation, 2002.”

June 20, 2002.

 94 Marie-Francoise Petitjean, “Booming floriculture in Africa,” Floriculture International, June

2002, p. 17.

 95 Ibid, p. 20.

 96 USDA, Foreign Agricultural Service, GAIN Report, “Kenyan Horticultural Situation, 2002.”

June 20, 2002.

33

production costs and in some cases productivity comparable to other key suppliers to the EU

market such as Israel and Latin American countries.92

Although the majority of African producing countries are highly dependent on roses,

producers in several countries have conducted strategic analyses to diversify production into

other flower types and into other types of products, such as ready-made bouquets. However,

for the majority of the countries in Africa, it remains a challenge to attract medium and longterm investment funds for the expansion of existing small-scale flower projects. 

African growers produce mainly for the European market. Flowers from African, Caribbean,

and Pacific countries receive duty-free treatment into the EU under the Cotonou agreement.

A proposal has been made to limit duty-free access for flowers to least developed countries

when the agreement comes up for renewal in 2007. Under these provisions, Kenya and

Zimbabwe, not considered least developed for purposes of the agreement, would have a

competitive disadvantage vis-a-vis other African cut flower producers such as Uganda,

Tanzania, and Zambia in exporting to the EU. 

Kenya, the largest cut flower grower in Africa, produced 41,400 metric tons of fresh cut

flowers for export in 2001. Although Kenya has the most diversified production of the

African producers, about two-thirds of its exports are roses. Carnations are the second-mostpopular flower export. Cut flower production is Kenya’s fastest growing sector of the

economy and ranks second after tea. Production increased by 22 percent between 1999 and

2000.

Kenyan exports of cut flowers were valued at $91 million in 2000.93 Improved air-freight

capacity and the construction of a modern cargo facility near the Nairobi airport facilitate

quick shipment of the vast majority of exports to the EU. Most Kenyan flowers are sold

through the Dutch flower auctions, but 15 percent is sold directly to British supermarkets.94

In 1999, Kenya surpassed Israel to become the largest import supplier of cut flowers to the

Dutch auction, and by 2000 captured 28 percent of the EU import market.95 The high growth

in the industry in recent years can be attributed to private sector initiatives, minimal

government interference, and liberalization of the economy.96 

Zimbabwe is the second-most-important African supplier to the EU, and the third-largest

overall supplier behind Kenya and Israel in 2000. Farmers traditionally growing maize and

tobacco farmers diversified their operations by cultivating 1 to 2 hectares of flowers on their

farms. By 2000, 1,150 hectares were devoted to cut flower production with 20,000 tons of

exports shipped almost exclusively to the Netherlands and Germany. Roses account for

70 percent of the country’s production. Political instability and governmental

mismanagement may lower productivity and export potential of the sector. In 2002, 
 97 Marie-Francoise Petitjean, “Booming floriculture in Africa,” Floriculture International, June

2002, p. 17.

 98 United Nations Statistical Office, Comtrade Data Base System.

34

President Mugabe’s government began expropriating farmland, affecting the entire

commercial farming sector and making the future of the floriculture industry uncertain.97

South Africa has a large number of hectares dedicated to the production of cut flowers that

mostly serves the domestic market. The country reported $11.6 million in exports for 2001,

with slightly more than one-half shipped to the EU, and the rest to Asia, Australia, and North

America.98 With an additional 189,000 hectares of land available for cultivation, South

Africa has enormous potential for increasing cut flower exports and has begun to address

relevant considerations for that endeavor such as technology and training, freight, and

quality standards.
APPENDIX A

EXPLANATION OF TARIFFS AND

TRADE AGREEMENT TERMS
A-2

TARIFF AND TRADE AGREEMENT

TERMS

In the Harmonized Tariff Schedule of the United States (HTS), chapters 1 through 97 cover

all goods in trade and incorporate in the tariff nomenclature the internationally adopted

Harmonized Commodity Description and Coding System through the 6-digit level of product

descriptionSubordinate 8-digit product subdivisions, either enacted by Congress or

proclaimed by the President, allow more narrowly applicable duty rates; 10-digit

administrative statistical reporting numbers provide data of national interestChapters 98 and

99 contain special U.S. classifications and temporary rate provisions, respectively. The HTS

replaced the Tariff Schedules of the United States (TSUS) effective January 1, 1989.

Duty rates in the general subcolumn of HTS column 1 are normal trade relations rates; many

general rates have been eliminated or are being reduced due to concessions resulting from

the Uruguay Round of Multilateral Trade Negotiations. Column 1-general duty rates apply

to all countries except those listed in HTS general note 3(b) (Cuba, Laos, and North Korea)

plus Serbia and Montenegro, which are subject to the statutory rates set forth in column 2.

Specified goods from designated general-rate countries may be eligible for reduced rates of

duty or duty-free entry under preferential tariff programs, as set forth in the special

subcolumn of HTS rate of duty column 1 or in the general notes. If eligibility for special

tariff rates is not claimed or established, goods are dutiable at column 1-general rates. The

HTS does not list countries covered by a total or partial embargo.

The Generalized System of Preferences (GSP) affords nonreciprocal tariff preferences to

designated beneficiary developing countries. The U.S. GSP, enacted in title V of the Trade

Act of 1974 for 10 years and extended several times thereafter, applies to merchandise

imported on or after January 1, 1976, and before the close of September 30, 2001. Indicated

by the symbol "A", "A*", or "A+" in the special subcolumn, GSP provides duty-free entry

to eligible articles the product of and imported directly from designated beneficiary

developing countries (see HTS gen. note 4). Eligible products of listed sub-Saharan African

countries may qualify for duty-free entry under the African Growth and Opportunity Act

(AGOA) (see HTS gen. note 16) through September 30, 2008, as indicated by the symbol

“D” in the special subcolumn; see subchapter XIX of chapter 98.

The Caribbean Basin Economic Recovery Act (CBERA) affords nonreciprocal tariff

preferences to designated developing countries in the Caribbean Basin area. The CBERA,

enacted in title II of Public Law 98-67, implemented by Presidential Proclamation 5133 of

November 30, 1983, and amended by the Customs and Trade Act of 1990, applies to goods

entered, or withdrawn from warehouse for consumption, on or after January 1, 1984.

Indicated by the symbol "E" or "E*" in the special subcolumn, CBERA provides duty-free

entry to eligible articles, and reduced-duty treatment to certain other articles, which are the

product of and imported directly from designated countries (see HTS gennote 7). Eligible

products of listed beneficiary countries may qualify for duty-free or reduced-duty entry

under the Caribbean Basin Trade Partnership Act (CBTPA) (see HTS gen. note 17),

through September 30, 2008, as indicated by the symbol “R” in the special subcolumn; see

subchapter XX of chapter 98.
A-3

Free rates of duty in the special subcolumn followed by the symbol "IL" are applicable to

products of Israel under the United States-Israel Free Trade Area Implementation Act of

1985 (IFTA), as provided in general note 8 to the HTS; see also subchapter VIII of

chapter 99. 

Preferential nonreciprocal duty-free or reduced-duty treatment in the special subcolumn

followed by the symbol "J" or "J*" in parentheses is afforded to eligible articles from

designated beneficiary countries under the Andean Trade Preference Act (ATPA), enacted

as title II of Public Law 102-182 and implemented by Presidential Proclamation 6455 of July

2, 1992 (effective July 22, 1992–Dec. 4, 2001) (see HTS gen. note 11).

Preferential free rates of duty in the special subcolumn followed by the symbol "CA" are

applicable to eligible goods of Canada, and rates followed by the symbol "MX" are

applicable to eligible goods of Mexico, under the North American Free Trade Agreement

(NAFTA), as provided in general note 12 to the HTS and implemented effective January 1,

1994, by Presidential Proclamation 6641 of December 15, 1993Goods must originate in the

NAFTA region under rules set forth in general note 12(t) and meet other requirements of the

note and applicable regulations.

Preferential rates of duty in the special subcolumn followed by the symbol “JO” are

applicable to eligible goods of Jordan under the United States-Jordan Free Trade Area

Implementation Act, (JFTA) effective as of Dec. 17, 2001; see HTS gen. note 18 and

subchapter IX of chapter 99.

Other special tariff treatment applies to particular products of insular possessions (gen. note

3(a)(iv)), products of the West Bank and Gaza Strip (gen. note 3(a)(v)), goods covered by

the Automotive Products Trade Act (APTA) (gen. note 5) and the Agreement on Trade in

Civil Aircraft (ATCA) (gen. note 6), articles imported from freely associated states (gen.

note 10), pharmaceutical products (gen. note 13), and intermediate chemicals for dyes (gen.

note 14).

The General Agreement on Tariffs and Trade 1994 (GATT 1994), pursuant to the

Agreement Establishing the World Trade Organization, is based upon the earlier GATT 1947

(61 Stat. (pt. 5) A58; 8 UST (pt. 2) 1786) as the primary multilateral system of disciplines

and principles governing international trade. Signatories' obligations under both the 1994 and

1947 agreements focus upon most-favored-nation treatment, the maintenance of scheduled

concession rates of duty, and national treatment for imported products; the GATT also

provides the legal framework for customs valuation standards, "escape clause" (emergency)

actions, antidumping and countervailing duties, dispute settlement, and other measures. The

results of the Uruguay Round of multilateral tariff negotiations are set forth by way of

separate schedules of concessions for each participating contracting party, with the U.S.

schedule designated as Schedule XX. Pursuant to the Agreement on Textiles and Clothing

(ATC) of the GATT 1994, member countries are phasing out restrictions on imports under

the prior "Arrangement Regarding International Trade in Textiles" (known as the Multifiber

Arrangement (MFA))Under the MFA, which was a departure from GATT 1947 provisions,

importing and exporting countries negotiated bilateral agreements limiting textile and

apparel shipments, and importing countries could take unilateral action in the absence or

violation of an agreement. Quantitative limits had been established on imported textiles and

apparel of cotton, other vegetable fibers, wool, man-made fibers or silk blends in an effort

to prevent or limit market disruption in the importing countries. The ATC establishes

notification and safeguard procedures, along with other rules concerning the customs

treatment of textile and apparel shipments, and calls for the eventual complete integration

of this sector into the GATT 1994 over a ten-year period, or by Jan. 1, 2005.